NatWest Imposes Daily Crypto Exchange Transaction Limits Over Fraud Concerns

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In Brief
  • NatWest bank imposes a daily limit on transactions related to crypto exchanges.

  • It's unclear what this specific amount is.

  • The bank made the decision to protect customers from criminal exploitation.

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U.K. bank NatWest has imposed a daily cap on transactions related to crypto exchanges as a result of concerns about scams and frauds.

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United Kingdom’s NatWest bank has imposed restrictions on transactions linked to cryptocurrency exchanges, including Binance, according to a report from Reuters published on June 29. The change follows the news of the U.K.’s Financial Conduct Authority (FCA) warning Binance not to carry out regulated operations without a license.

Customers now have a daily limit on the amount of funds they can send to crypto exchanges. It is unclear what this specific amount is, but it is believed to be in the range of a few thousand pounds and depends on the platform. Binance is only one of many platforms that is at the receiving end of this rule change.

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A spokesperson told Reuters that the change is a consequence of concerns related to scams and frauds. The source also added that the bank made the decision to protect customers from criminal exploitation, and that it has also blocked payments to a small number of crypto firms. These firms have apparently “seen particularly significant levels of fraud-related harm for our customers.”

The move comes as authorities the world over are focusing their efforts on reining in the crypto market. Binance has been a specific target, given its dominance among crypto exchanges. It has vowed to work with authorities to follow compliance laws, but it’s likely to face some pushback from regulators nonetheless.

Crypto regulations picking up steam

The capping of transactions by NatWest is clearly a result of the regulatory efforts by U.K. authorities, which has ramped up its scrutiny of the market in the past few weeks. Officials in the country have repeatedly said that the market holds dangers for retail investors, being risky and subject to fraud. This is a position that some other countries have also taken, and which have likewise issued new orders.

The Bank of Mexico published a notice recently saying that cryptocurrencies are not currencies and could not be used within the financial system. The country’s finance minister also clarified the same.

The Financial Action Task Force (FATF) has been meeting with officials to discuss crypto with various countries, including Malta. Its concern, which is shared by some governments, is that crypto could be used to facilitate illicit activities.

Meanwhile, countries like South Korea have already implemented several regulatory laws for crypto exchanges. The Asian nation will likely see its first fully regulated exchange in August.

Still, a few countries are warming up to cryptocurrencies, not the least of which is El Salvador, which is marching ahead with its plans to introduce bitcoin into the economy. The country plans to release a digital wallet in September, which would hand citizens $30 in bitcoin after they download it.

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Rahul's cryptocurrency journey first began in 2014. With a postgraduate degree in finance, he was among the few that first recognized the sheer untapped potential of decentralized technologies. Since then, he has guided a number of startups to navigate the complex digital marketing and media outreach landscapes. His work has even influenced distinguished cryptocurrency exchanges and DeFi platforms worth millions of dollars.

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