British bank Starling has temporarily banned its clients from sending deposits to cryptocurrency trading platforms due to the risks of committing financial crimes.
Starling customers are prohibited from sending money from their accounts to cryptocurrency exchanges, while they can withdraw funds from there to Starling accounts without restrictions. The bank’s management was forced to take such measures to protect customers. There are suspicions that funds transferred to cryptocurrency exchanges could be used for criminal activity, as the number of financial crimes has been increasing recently.
The bank will lift the ban after introducing additional checks that Starling clients will have to go through when transferring funds to cryptocurrency exchanges. A Starling spokesman did not name the approximate timeframe for lifting the restrictions, but said that “this problem affects not only Starling, but all banks.”
However, other financial institutions in the UK have not yet taken such a categorical position in relation to cryptoassets. For example, banking giant Barclays said it would not prohibit customers from making deposits on cryptocurrency exchanges.
NatWest recently warned clients against working with cryptocurrency firms offering investment assistance and promising big returns. The bank has announced its readiness to stop serving digital asset firms, but has not yet imposed any restrictions. NatWest recommended its clients to cooperate only with those cryptocurrency companies that have received a license from the UK Financial Conduct Authority (FCA).
Only five firms have such permission: Ziglu, a cryptocurrency bank founded last year by Starling co-founder Mark Hipperson, Gemini Europe Services Ltd, Gemini Europe Ltd, Digivault and Archax. The UK minister recently reported that few cryptocurrency firms adhere to anti-money laundering (AML) regulations, which is starting to worry some banks.
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