- British lender TSB said it was planning to prevent its retail clients from buying cryptocurrencies.
- Widespread fraud across the crypto market means it’s too expensive to reimburse clients, the bank said.
- UK Finance said the amount of money lost to investment scams rose 42% from 2019 to 2020 to $188 million.
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British lender TSB is going to ban its customers from buying cryptocurrencies from accounts that it believes are vulnerable to fraud.
“We take our obligation to protect customers extremely seriously and continually review merchants and websites with excessively high fraud rates,” a TSB spokesperson said in an email to Insider on Monday. The bank said it had not yet put a deadline in place for any bans to take effect.
The bank’s decision follows after the UK regulator stopped crypto platform Binance from operating in Britain without written consent.
TSB, which is owned by Spain’s Banco Sabadell, said that between March 15th and April 15th, 849 of its clients lost money via Binance accounts.
The bank’s decision affects its more than 5 million customers, who it fears could fall prey to scammers that steal money from fake crypto wallets. It said it also found that it was too costly to replace any money that had been stolen in line with their pledge to customers to reimburse them if they are victims of fraud
In the UK, investment scams rose by 42% to £135.1 million ($188 million) between 2019 and 2020, according to research and policy advisory firm UK Finance.
Data from Chainanalysis , a blockchain data platform, suggests by 2020 there were $13 million worth of illicit crypto from 1,138,030 transactions around the world.
Customers from the likes of banks like online platform Monzo and UK banks HSBC, Barclays and Starling have been blocked from transferring money to Binance and SwissBorg, an investment app, according to a report last month in Britain’s Telegraph newspaper.
HSBC, Europe’s largest bank by assets, said recently it would not expand its business to include cryptocurrencies, given the volatility and lack of transparency of bitcoin.
Binance was not immediately available to respond when contacted by Insider for comment.