Starling Bank, a digital challenger bank based in the UK, halted the crypto card payments, citing that crypto activities are “high risk.”
Starling Bank is a digital challenger bank, having more than a million accounts in the UK. Digital challenger banks are banks that don’t have any physical branches. The bank operates entirely online.
Starling Bank Halted Crypto Transactions.
A Starling Bank customer received a notification that the bank no longer supports crypto transactions. The customer then questioned the bank on Twitter, to which they got a reply that the bank is reviewing its position against financial crimes and considers crypto activity as “high risk.” The bank has implemented further restrictions on ongoing and incoming crypto transactions.
A spokesperson from Starling quoted to Sifted:
“The innovative technology, and thinking, behind cryptocurrencies, has great potential advantages, however, right now, they are high risk and heavily used for criminal purposes and, as such, we no longer support them.”
The Crypto Crackdown Continues After FTX
The recent FTX collapse has led regulators to view the crypto industry under scrutiny. The Attorney General of New York, Letitia James, urged the US Congress to prohibit people from purchasing cryptocurrencies with their Individual Retirement Accounts (IRA).
“On behalf of the People of the State of New York, I urge Congress to pass legislation to designate digital assets—e.g., cryptocurrencies, digital coins, and digital tokens—as assets that cannot be purchased using funds in Individual Retirement Accounts (“IRAs”) and defined Page 2 contribution plans, such as 401(k) and 457 plans.”
The letter also mentioned that crypto trading platforms lack customer protection and transparency. Letitia James explained the point with the example of Nathaniel Chastain, the former OpenSea Employee charged with NFT insider trading. It is alleged that the former product manager used foreknowledge of OpenSea’s listing to rake in huge profits.
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