Why the UK is Imposing Restrictions on Crypto-Exchanges?
MADE IN CANVA
The UK has certainly seen the worst side of cryptocurrencies in the past few weeks. Major scams and frauds are becoming rampant, although the UK has blamed Binance to a major extent, it is uncertain whether this will result in a full-on ban on cryptocurrencies in the near future.
TSB Bank shutting down Crypto-related services!
According to research and policy advisory firm UK Finance, investment scams increased 42% from 2019 to 2020 to $188 million. Cryptocurrency scams are not new to the UK, and neither are they taking place on a small scale. Major UK Bank, TSB, in order to end this, decided on preventing customers who it believed were more likely to be scammed from purchasing cryptocurrencies. TSB provides over 5 million clients, banking services and has also recently adopted cryptocurrency transactions. It has also stated that reimbursing every client for a scam is outside the bank’s capability. A major portion of these scams took place via Binance and Kraken (Binance and Kraken are in the top 5 Crypto Exchanges when it comes to trading volume) accounts, specifically digital wallets. Digital wallets are at a higher risk of being stolen from as the security it offers is inferior to cold wallets (Physical Crypto wallets). Although the bank has no intention of forcing an all-around ban on cryptos in the near future, major banks like HSBC are pulling back from cryptocurrencies in fear of regulatory issues and market volatility.
FCA Cracking down on Binance!
The Financial Conduct Authority of Binance has completely restricted Binance’s ability to carry out any regulated activity in the UK. This does not completely put an end to Binance in the UK as it can still trade with UK customers. However, it can’t provide other investing services which are unique to the platform. The company also has to put a warning for UK users on its website and app, which will highlight the FCA ban.
Binance has also put up its own set of restrictions to combat the widespread fraud that is continuing to take place by eliminating the ability for UK customers to make withdrawals using bank cards, in addition, to directly transferring money into their bank accounts. This will limit the chances of people scamming people via bank accounts and force transactions through the Exchange which assumingly will provide greater security, Although this does make it less convenient for avid Binance users in the UK.
NatWest and Binance working on fighting Scams!
NatWest Group is the largest commercial bank in the UK that is working to be more transparent and cater to its users while offering the best services to the community. The Natwest app is using alerts to warn people about potential scams by describing what these scams look like and what kinds of things they say to lure people in. It also gives precautionary measures along with things you could do to prevent future scams.
Binance has also been working with the regional crime unit in the UK to prevent scams. It is great to know that considering its reputation has taken a major hit after many fraud cases. Dealing in cryptocurrencies has always been a difficult task and protecting its users is something that Crypto Exchanges have to prioritize at any cost to maintain their customers.
DWAYNE D’CUNHA, WRITER ON MEDIUM.
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Why the UK is imposing Restrictions on Crypto-Exchanges? was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.