National Westminster Bank now prohibits its customers to spend more than $1,215 on the crypto purchases.
Crypto 2022 was a disaster for the crypto sector because in that year, many popular crypto companies including crypto assets collapsed badly. The downfall of those crypto companies also impacted the business of their banking partners significantly. Over the last two weeks of the time frame, around half a dozen banks reported bad financial positions citing the bankruptcy of their partnered crypto companies.
On 14 March 2023, Bloomberg reported Popular UK-based financial institution National Westminster Bank (NatWest) imposed new restrictions on its customers over crypto assets purchases.
Under its new rule, no one of its customers can purchase more than £1,000 ($1,215) per day or £5,000 ($6,090) every 30 days worth of crypto assets. In short, this rule will indirectly prohibit customers from purchasing crypto assets in bulk.
According to NatWest, the UK’s third-largest bank by market capitalization, the latest decision by this bank will help to save the customers from losing their life earnings through investment in highly volatile & scam assets.
Stuart Skinner, NatWest’s head of fraud protection, said that the bank took this decision because of the increasing crypto scam across crypto exchanges.
“Criminals play on a lack of understanding of how cryptocurrency markets work and their unpredictability, to encourage investors to transfer money to exchanges, which are often set up in the customer’s name by the criminal or by the victim, under duress from the criminal,” the Bank official said.
Earlier in June 2021, this bank imposed temporary restrictions on customers to prohibit crypto purchases on crypto exchanges citing rapidly surging crypto investment scams.
FTX exchange fraud
FTX, a popular crypto exchange that went bankrupt in Nov 2022, ended its operations with huge numbers of bad outcomes for the crypto sector.
After the bankruptcy of the FTX exchange, many reputed crypto companies collapsed badly. And also the whole situation resulted in a very big negative impact on the trust level of the crypto traders over centralised crypto services. Allegedly FTX ex-CEO Sam Bankman-Fried (SBF) misused & mismanaged customers’ fund for personal benefits.