Starling Bank prohibits crypto purchases and deposits citing danger
The digital bank Starling, which is situated in the United Kingdom, is the most recent financial institution to prohibit its cardholders from engaging in any transactions or activities linked to cryptocurrencies.
Customers of Starling will no longer be able to make purchases of cryptocurrencies such as Bitcoin (BTC) or receive inbound transfers from crypto exchanges or shops accepting Bitcoin as payment.
The online bank made the announcement to its clients as well as on Twitter, citing the high perceived risks associated with cryptocurrency trading as the reason for the decision.
The bank took these steps in the midst of an ongoing crisis in the cryptocurrency business involving FTX, one of the largest crypto exchanges in the world, which is accused of misappropriating customer cash together with its sister company, Alameda.
According to the documents filed by FTX in its bankruptcy proceeding, the company owes more than $3 billion to its 50 largest creditors, and the total number of investors who are creditors is apparently above 1 million.
This is not the first time that Starling has implemented limits on activities linked to cryptocurrencies and blockchain technology.
In May 2021, the bank temporarily blocked payments to cryptocurrency exchanges due to similar concerns. The bank cited "high levels of suspected financial crime with payments to some cryptocurrency exchanges." as the reason for the temporary stoppage.
The ban comes only a few weeks after Santander UK restricted client contributions to cryptocurrency exchanges to a maximum of 1,000 British pounds ($1,196) per transaction and 3,000 British pounds ($3,588) overall per month.
According to recent reports, a number of other British banks have fully barred transactions relating to cryptocurrencies.
In June of 2017, TSB bank restricted the ability of its 5.4 million clients to purchase bitcoin.