Santander sent an email to customers declaring their intention to block real-time payments to all crypto exchanges, starting next year.
Banco Santander, which is one of the largest banks to operate in the UK, is set to block any and all UK customers from making real-time payments to cryptocurrency exchanges. The move is intended to protect customers from crypto scams. A spokesperson for Santander said “in recent months we’ve seen a large increase in UK customers becoming victims of cryptocurrency fraud”, adding “we want to do everything we can to protect our customers and we feel that limiting payments to cryptocurrency exchanges is the best way to make sure your money stays safe.”
That said, the extent of this ban is not particularly clear at the time of writing. Most cryptocurrency exchanges are unregulated, unlike more conventional currency and stock exchanges, and many crypto exchanges have their headquarters in offshore locations such as the Bahamas. Given the very recent collapse of FTX, it is not hard to see why Santander is taking this action to protect its customers. They declared their intention to “further protect customers by blocking all Faster Payments we identify to cryptocurrency exchanges from Santander accounts – this will be implemented during the course of 2023”. The block will not come into effect until next year, but more immediate action has already been taken in the form of limits (effective from November 15th 2022) which are placed upon the amount of money which customers can pay through online and mobile banking from their Santander accounts into crypto exchanges.
This is not the case for all crypto exchanges though; Bitstamp, CoinJar and Gemini are all FCA registered firms. This shows that some of these crypto firms can be and are willing to comply with anti-money laundering (AML) and know-your-customer (KYC) regulations. Asher Tan, the co-founder and chief executive of CoinJar, called the announcement by Santander an ‘unfortunate thing to hear’, also stating that ‘as an FCA-registered exchange operator, that’s not the sort of relationship we want to have with the rest of the financial system’.
Santander is not alone in this, with an estimated 47% (according to Finder) of major UK banks being against cryptocurrencies. This group includes other big names such as Lloyds, Nationwide, TSB Bank and HSBC. Banks and fintech’s which have more recently started operations in the UK are not following this trend though. For example, fintech Revolut (active in the UK since 2015), which is authorised by the FCA as an Electronic Money Institution and is registered with the FCA to offer cryptocurrency services, has launched a card which permits users to pay for their services and goods in crypto, demonstrating that the world of crypto is indeed a constantly changing financial landscape.
Who it affects
This directly affects customers of the bank but has wider implications too, as this ban will extend to all cryptocurrency exchanges, including FCA registered firms.
