NEW YORK (AP) — Chase UK, JP Morgan’s British digital bank, says it will bar customers from making cryptocurrency transactions starting next month — citing an uptick in scams and fraud.
From Oct. 16 onward, Chase customers will no longer be able to make crypto transactions using their debit card or through an outgoing bank transfer, the bank said Tuesday.
“If we think you’re making a payment related to crypto assets, we’ll decline it,” Chase said in an email to customers. “If you’d still like to invest in crypto assets, you can try using a different bank or provider instead — but please be cautious, as you may not be able to get the money back if the payment ends up being related to fraud or a scam.”
In a statement to The Associated Press, Chase said that Tuesday’s decision was made to help keep customers and their money safe. The bank also pointed to increases in crypto fraud-related losses reported by UK regulators in the last year.
According to London-based law firm RPC, data from Britain’s fraud reporting agency Action Fraud shows that the value of crypto fraud in the U.K. increased 41% last year — reaching a record high of 306 million pounds ($372.3 million). The November collapse of cryptocurrency exchange FTC notably caused a sharp increase in fraud reports, RPC said when sharing the findings in May, with numbers easing some at the start of 2023.
Still, crypto fraud will probably remain high in the foreseeable future, RPC partner Dan Wyatt and senior associate Christopher Whitehouse said via email. They noted that, while investors are learning more about spotting scams, those scams are also becoming increasingly sophisticated, particularly among fraudsters using artificial intelligence to their advantage. And when crypto values begin to increase again, an influx of activity on the market is likely.
The AP also reached out to Action Fraud for statement Tuesday following Chase’s decision to stop customers from making crypto transactions.
JPMorgan Chase launched its U.K.-based digital bank under the Chase name back in September 2021. As of May of this year, Chase had more than 1.6 million customers in the U.K.
Chase UK isn’t the only bank that has changed its crypto policies over fraud concerns in recent years. In March, for example, British bank NatWest implemented new daily and monthly limits on cryptocurrency exchanges — of 1,000 and 5,000 pounds (about $1,200 and $6,100), respectively — while similarly citing the need to protect consumers from scams.
Other banks have blocked customers’ ability to use their accounts for crypto-related activity, Wyatt and Whitehouse added.
“This action is publicly driven by a desire to help save customers from themselves — i.e. to make it harder for customers to participate in crypto markets and therefore less likely to fall victim to scams,” they wrote. “But there is an equally important second driver — to reduce the risk to banks of their customers falling victim to scams and then looking to their banks for help and, potentially also, recompense.”