Starling Bank, a challenger bank in the United Kingdom, is now banning its customers from making any transaction related to cryptocurrencies using its cards. The digital bank is citing the “high risk” of crypto activities behind its move.
The challenger bank did not reveal anything officially until one of its customers complained about failed cryptocurrency transactions on social media.
“We always review our position in relation to financial crime. We consider crypto activity to be high risk. We’ve taken the decision to prevent all card payments to crypto merchants and to implement further restrictions on outgoing and incoming transfers,” Starling Bank wrote in a Tweet.
A Challenger bank
Starling had 2.7 million customers, according to its latest official metrics. Additionally, the digital bank generated £188 million in revenue, which jumped 93 percent, in fiscal 2022. It became a profitable company, turning over £30 million in pre-tax profits.
It was not the first time Staring cracked down on crypto. The challenger bank suspended payments to crypto exchanges for a month in May 2021, citing “high levels of suspected financial crime with payments to some cryptocurrency exchanges.”
While Starling banned crypto transactions with all of its cards, several other UK banks imposed restrictions on crypto transactions only with their credit cards. Lloyds, NatWest and Virgin reportedly have not allowed crypto transactions with their credit cards since 2018.
Though Starling did not specify anything, its latest crackdown on crypto might have been influenced by the recent collapse of FTX. The Sam Bankman-Fried-founded cryptocurrency exchange, one of the reputed and aggressively growing crypto startups, collapsed within days due to some controversial and allegedly fraudulent decisions by its former CEO.
Now, financial market regulators worldwide are becoming vigilant after the FTX fall out. Several regulators, including the ones in Australia and Cyprus, have suspended the licenses of local FTX entities. At the same time, the Bahamian watchdog transferred the customer assets held by the local FTX entity to government-controlled wallets.
