Starling Bank Intensifies Crackdown on Cryptos as it Blocks Transactions
The UK digital bank – Starling defied the increased crypto adoption by conventional financial institutions to bar cardholders from crypto-related transfers and activities. The announcement shared with the media indicated Starling’s crackdown made cryptocurrencies purchase from merchants and receipt of incoming transfers inaccessible to customers.
Tightened Restrictions on Inbound and Outbound Crypto Transactions
The statement captured in the online bank Twitter hurdle cited the high risks inherent in crypto trading. Further, the November 22 tweet considered cryptocurrencies vulnerable to facilitate criminal objectives. While acknowledging the varying restrictions imposed by Startling Bank, the representative indicated that the need for a tighter stance on inbound and outbound crypto transactions affected both card and bank transfers.
Criticism of Starling’s Blanket Ban
Although founded upon innovative technology, cryptocurrencies are exploited for criminal purposes, a reason for not supporting related transactions. The spokesperson added that the bank’s measures were necessitated by discovering the FTX scandal involving misappropriating users’ funds.
Crypto community members considered Starling’s preference for a blanket ban unreasonable and should flag transactions considered outright fraud instead. Crypto enthusiast SovrynBTC considered banning legitimate transactions unacceptable, indicating banks’ previous failure to express a similar concern for risky transactions such as stock trading and gambling.
British Banks Restrict Crypto Transactions
Starling’s decision to suspend crypto-related activities reinforced May 2021 crackdown when it cited the cryptocurrency exchanges were vulnerable to suspected financial crime. While Starling resumed full operations 30 days later, the recent ban replicated UK banks’ restrictive nature.
Particularly, Santander UK capped crypto deposits to exchanges at $1,196 per transaction and a monthly limit of $3,588. The November 15 announcement emphasized that Santander will retain bans on payments sent to Binance though receipts are accessible for its online and mobile banking customers.
The restrictive nature of UK financial institutions was evident in 2018 when lenders such as Virgin, Natwest, and Lloyds prohibited the acquisition of cryptos via credit cards. The trend was replicated in June 2021 when TSB banks made the purchase of Bitcoin inaccessible for its 5.4 million customers.
It is conceivable that recent restrictions are triggered by the need to shield Starling digital products from a contagious meltdown following the collapse of primary crypto actors engulfed in the FTX Group’s downfall.
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