As the crypto community continues to suffer from the legal steps taken by the Securities and Exchange Commission (SEC), several crypto and banking giants are taking this regulatory approach seriously by controlling users’ involvement in the crypto space. According to recent news by Reuters, Britain’s Nationwide has decided to put the brakes on customer purchases of digital currencies in the midst of regulatory chaos surrounding the world of cryptocurrency. The move is the latest in a series of measures aimed at curbing the risks associated with cryptocurrency trading.
Britain Starts Controlling Crypto Purchases
Nationwide, the UK’s largest building society has announced that it will no longer allow its customers to use their debit or credit cards to buy cryptocurrencies. The move comes after a review of the risks associated with cryptocurrency trading and the protection of Nationwide’s customers’ assets.
In an email sent to its members on Thursday, Britain’s Nationwide Building Society announced that it had imposed restrictions on customers’ ability to purchase cryptocurrencies. According to the lender, it will now prohibit credit card payments to crypto exchanges and cap purchases made with current adult current accounts at £5,000 ($5,995) per day.
This latest move by Nationwide follows similar actions taken by other banks, such as Lloyds, which banned customers from using credit cards to buy cryptocurrencies in February 2018. Barclays also announced earlier last year that it would no longer allow customers to use their credit cards to purchase cryptocurrencies.
The regulatory landscape surrounding cryptocurrencies in the UK still needs to be clarified, with different regulators having different approaches to the issue. The Financial Conduct Authority (FCA), for example, has warned investors of the risks associated with cryptocurrency trading and has proposed tighter regulations to protect consumers.
UK To Follow SEC’s Legal Actions
Several countries are now giving attention to crypto regulation as the SEC has warned users of the risks related to crypto assets following the demise of crypto giant FTX, wiping billions of dollars from the crypto market. The United Kingdom is no exception in following the SEC’s footsteps, as the Bank of England has warned of the potential risks to financial stability posed by cryptocurrencies and has urged regulators to tackle the issue. Unfortunately, this lack of a coordinated approach has led to confusion and uncertainty for financial institutions trying to navigate the risks and potential benefits of the cryptocurrency market.
As a means of safeguarding its customers from fraudulent activity, Santander (SAN.MC) implemented restrictions in November on the amount that customers could transfer to cryptocurrency exchanges. Furthermore, the bank stated that it would soon prevent UK customers from conducting real-time payments to any cryptocurrency exchanges.
According to the website, Nationwide has confirmed that it will maintain its prohibition on payments to the Binance cryptocurrency exchange. The decision was based on a combination of factors, including “similar action from other providers, media coverage, and regulatory uncertainty.”
Binance is currently under investigation by the U.S. Department of Justice for alleged money laundering and sanctions violations. In response to the investigation, Binance has stated that it collaborates with regulatory agencies on a regular basis to address any concerns they may have.
While Nationwide’s move may be a disappointment to some cryptocurrency enthusiasts, it is essential to remember that the financial industry has a responsibility to protect its customers from potential risks. As the regulatory landscape continues to evolve, more financial institutions will likely take similar measures to safeguard their customers’ interests.
In the meantime, investors and traders in the cryptocurrency market must remain vigilant and exercise caution when investing in digital currencies. The lack of regulation means there is still a high risk of fraud and scams, and investors must be careful to research any cryptocurrency investment before committing their funds.