Kroo, a digital bank based in London, has announced that it will stop crypto transactions for its customers. The move comes amid a rise in online fraud and crypto-related scams.
According to the bank’s rules, Kroo will restrict an account if it’s used to buy or exchange cryptocurrency, or if credits from cryptocurrency transactions are deposited into it. In such cases, payments related to these activities will not be processed and repeated involvement may result in account closure.
Accounts on Kroo can be frozen if there is suspicion of cryptocurrency use.
The bank issued a statement saying it will no longer support cryptocurrency-related bank transfers or card transactions, effective May 30, 2024.
Kroo, a challenger bank, is entering the business landscape to compete with established banking giants. In line with other UK challenger banks such as Starling Bank and Chase UK, Kroo is implementing cryptocurrency bans.
Banks warn of cryptocurrency scams
Numerous international banks have expressed concern about the perceived lack of security in cryptocurrencies. Some claim that cryptocurrencies are not as anonymous as commonly believed.
In February, the Central Bank of Russia revealed that nearly half of financial fraud cases in the country in 2023 involved payments made in cryptocurrencies and foreign currencies.
In the United States, Federal Reserve officials have highlighted the risk of fraud and scams should banks decide to incorporate cryptocurrencies and adopt central bank digital currencies (CBDCs).
