Key Takeaways:
- Following a review of its stance on “financial crime,” Starling Bank has decided to stop supporting cryptocurrency transactions for its customers.
- The bank placed the ban into effect by notifying users via the Starling app.
Starling Bank declared a ban on all cryptocurrency transactions for customers, escalating its clampdown on customer trading. The bank referred to the interaction as a “significant risk and extensively used for illicit purposes.”
Starling Bank informed customers who had previously engaged in similar transactions via text message: “We’ve decided to prevent all card payments to cryptocurrency merchants and to implement further restrictions on outgoing and incoming transfers.”
The decision was made in the midst of growing scrutiny surrounding cryptocurrency in the wake of FTX’s bankruptcy, which left billions of dollars in unclaimed customer funds, as well as ongoing liquidity crises in the entire industry.
Customers of the UK-based digital bank have received a text message that states: “We view crypto activity as high risk.
“We’ve decided to stop all card payments to cryptocurrency merchants and to impose additional restrictions on outgoing and incoming transfers,” the statement reads.
A spokesperson of Starling Bank claims that the institution has long maintained restrictions on cryptocurrency transactions of varying degrees. According to the delegate, Starling recently tightened regulations on transactional operations involving bank transfers and card payments both in and out.
Starling customers can no longer use their accounts to transfer money into or out of cryptocurrency exchanges.
Starling’s founder and CEO, Anne Boden, has previously expressed her opposition to cryptocurrencies strongly, highlighting her lack of interest in the field’s rapid technological development. Cryptocurrency, as per Boden, is “very dangerous” because it greatly increases the risk to the established payment power grid.
UK banks and financial regulators are starting to act in rebuttal to the FTX implosion and the crisis in the cryptocurrency market. Even in South Korea, the regulators are talking about enacting legislation that would make it mandatory to create a system that keeps cryptocurrency user deposits separate from exchanges’ own assets, among other things.
