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FTX collapse: The full list of UK banks blocking transactions to crypto exchanges

By Capital.com News

Edited by Charlie Mellor

13:10, 24 November 2022

A smartphone displays the name and logo of Starling Bank
Starling Bank stopped customers making payments to crypto exchanges – Photo: Shutterstock

Starling Bank has restricted its customers from sending payments to cryptocurrency exchanges. 

The digital challenger bank joined the likes of Halifax (LLOY), HSBC (HSBA), The Co-operative Bank, TSB, Metro Bank (MTRO) and Virgin Money (VMUK), which have put similar policies in place.

The London-headquartered bank’s decision from Tuesday came into effect immediately. 

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Restrictions on outgoing and incoming transfers

“We always review our position in relation to financial crime,” the company explained its decision. It added: 

“We consider crypto activity to be high-risk. We’ve taken the decision to prevent all card payments to crypto merchants and to implement further restrictions on outgoing and incoming transfers.”

Starling's decision follows a similar move from the UK arm of the Spanish multinational bank Santander (SANe), which decided to block its British users from sending payments to crypto exchanges earlier this month.

Santander UK announced the policy prior to the collapse of crypto exchange giant FTX.

ETH/USD

3,331.11 Price
-4.450% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

SOL/USD

178.98 Price
+2.380% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

XRP/USD

0.62 Price
+2.640% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

BTC/USD

65,469.80 Price
-0.620% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

“Keeping our customers safe from cryptocurrency scams is a top priority,” said Santander in a statment to Reuters at the time.

“We intend 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.” 

Growing list of UK banks blocking payments to crypto platforms

Starling and Santander UK’s restrictions mean that clients of a growing number of UK banks are restricted from sending assets to crypto platforms.

Only last month, personal finance comparison website Finder.com found that 47% of the UK’s major banks placed restrictions on payments to crypto exchanges. Finder.com asked 17 of the UK’s major banks about their policies around the subject.

The research, published by The Fintech Times, found that seven of the surveyed banks – Halifax, HSBC, The Co-operative Bank, TSB, Metro Bank and Virgin Money – did not allow their customers to send payments to crypto exchanges.

Markets in this article

BTC/USD
Bitcoin / USD
65469.80 USD
-408.35 -0.620%
VMUK
Virgin Money UK
2.1755 USD
-0.001 -0.050%
HSBA
HSBC - GBP
6.630 USD
-0.032 -0.480%
MTRO
Metro Bank
0.395 USD
0 0.000%
SANe
Banco Santander
4.705 USD
0.115 +2.520%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

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