To decrease their exposure to the volatile cryptocurrency asset class, NatWest, a renowned UK-based financial institution, has limited the funds its clients can utilize for crypto transactions. As per a report by Bloomberg, NatWest customers are now subject to a daily transfer cap of £1,000 ($1,215) or £5,000 ($6,090) every 30 days for deposits into crypto exchanges.
NatWest, the third-largest bank in the UK by market capitalization, has implemented limits on its customers' crypto transactions to prevent them from suffering significant financial losses due to investments and scams involving cryptocurrencies.
According to the bank, fraudsters use misleading promises of high returns to entice investors who are unaware of the volatility and intricacies of the crypto market, resulting in an increase in the number of scams through crypto exchanges. Stuart Skinner, head of fraud protection at NatWest, cited the need to safeguard customers from these fraudulent activities as the reason for implementing the limits.
The bank highlighted in a statement that criminals exploit the lack of understanding of the crypto market to coerce investors into transferring money to exchanges set up in their name or by the victim under pressure.
Previously, NatWest had already imposed limits on the amount its customers could transfer to crypto exchanges due to the rise of investment scams and fraud. The bank implemented temporary restrictions in June 2021 to curb fraudulent activities, and it also blocked transfers to certain crypto companies that posed a risk of harm to its users.
Several other banks in the UK have also implemented similar restrictions or bans on crypto purchases for their customers. For example, HSBC recently prohibited the use of credit cards for purchasing cryptocurrencies due to potential risks, and Nationwide bank placed a daily limit of £5,000 ($6,090) on all debit card purchases of digital assets.