On Tuesday, the UK-based National Westminster Bank (NatWest), which is the third largest bank by market capitalization, put a limit on the amount their customers can spend on buying crypto products. The bank counts this step as a measure aimed at protecting its customers.
The banking giant has restricted the funds its customers can spend on crypto purchases to reduce their exposure to the volatile asset class. Sources reveal that the NatWest account holders now have a transfer limit of £1,000 ($1,215) per day or £5,000 ($6,090) every 30 days into crypto exchanges.
According to the bank executives, the decision would prevent its customers from “losing life-changing sums of money” on crypto investments and scams. The bank disclosed that fraudsters are using false promises of high returns to entice investors, preying on their lack of understanding of crypto and its volatility to lure them into transferring money to crypto exchanges.
Stuart Skinner, NatWest’s head of fraud protection, highlighted that the increase in the number of scams running through crypto exchanges forced the bank to implement the limits as the company is striving to protect its customers. In a statement released by the bank, it said that the cybercriminals take benefit of the lack of awareness and understanding of crypto among the masses. They can easily persuade investors to put their money into fraudulent schemes. Quoting the bank:
Criminals play on a lack of understanding of how cryptocurrency markets work and their unpredictability, to encourage investors to transfer money to exchanges, which are often set up in the customer’s name by the criminal or by the victim, under duress from the criminal.
Notably, this is not the first time Natwest bank has imposed such restrictions on its users. In June 2021, the bank temporarily limited the amount customers could send to crypto exchanges due to the rapid increase in investment scams and fraud. At the time, NatWest also blocked transfers to several crypto firms that showed signs of fraud-related harm to its users.
Also, NatWest Bank is not the only bank to have a cautious approach to crypto. In November, Santander, another UK-based bank, prohibited real-time payments to cryptocurrency exchanges. The bank sent an email to customers informing them about the action and said that it is meant to shield customers from scammers. Since November 15, mobile and online banking payments to cryptocurrency exchanges have been restricted to a maximum of £1,000 per transaction and £3,000 each rolling 30-day period.
However, the concerns of the banks are genuine as the country has been emerging to be a safe spot for scammers. Todayq News reported a joint investigation conducted by the Bureau of Investigative Journalism and the Observer which uncovered that the country has become a hub for crypto and forex scams. The investigation revealed that at least 168 companies have been accused of running fraudulent crypto or foreign exchange (forex) scams in the UK. The actual number is believed to be much higher.
Not just that, these frauds and scams don’t seem to decelerate anytime soon as the United Kingdom police unit Action Fraud published a study that revealed that crypto frauds in the country have risen by over 32% this year, taking the estimated value to 226 million pounds ($273 million).