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UK high street banks are quarantining from crypto
- docmechanic 4y agoFound this enlightening ... "White is also sceptical about solutions purporting to show which crypto companies represent a risk for banks and their customers. “It’s hard to individually predict which companies might later become a problem because, if banks knew a project was fraudulent, then people wouldn’t really be putting money into it,” she says." and this quite validating: "As financial institutions and the crypto industry continue to grapple over the right amount of regulation, others in the private sector have begun questioning the longevity and relevance of the industry itself after back-to-back scandals. Earlier this month in The Economist, the FTX collapse was described as a ‘catastrophic blow to crypto’s reputation and aspirations’ while a Reuters podcast similarly declared that the incident ‘consigns crypto to fringes of finance’. "
- TT482 4y agoyeah, it'd be interesting to see how the recent scandals like FTX shape opinions about crypto among other mainstream sectors beyond banking
- amluto 4y agoIf this policy expanded to all UK banks, it could plausibly make the UK a less interesting target for ransomware and similar cryptocurrency-backed extortion schemes.
- richardwhiuk 4y agoI imagine you'll always be able to use something like Western Union to make such payments.
- amluto 4y agoAt least in principal, with a service like Western Union, an actual human or other KYC’d entity needs to collect the money at the other end. If you run a $100M ransomware campaign, a very enthusiastic prosecutor is fairly likely to arrange to arrest people well before $100M gets cashed out, and without perfect opsec, you have a problem. And Western Union respects sanctions.
- richardwhiuk 4y agohttps://en.wikipedia.org/wiki/Western_Union#Controversies https://en.wikipedia.org/wiki/Western_Union#Controversies Not so much.
- amluto 4y agoI did say “in principle” for a reason (although I did misspell it). That being said, with a large enough fraud campaign, law enforcement really could target Western Union’s users.
- Gigachad 4y agoI believe Australia is moving towards making it illegal to pay crypto ransoms. Cybercrime has gone absolutely wild over the last few years and cutting off the money tap should do some good.
- TheGhostOfBoris 4y agoHere in Blighty, paying a ransom is legal per se....... .....but making payments to a sanctioned country or a terrorist organisation is very illegal (as I suspect it is in most of the world). For this reason, any organisation obeying the law will refuse to pay the ransom.
- tibanne 4y agoHow about letting people do what they want with their own money?
- nxm 4y agoBecause politicians will blame the banks when too many people lose their money
- beardyw 4y agoSadly that is what scammers say too.
- gonzo41 4y agoSociety picks up the bill when mom and dad bet the pension savings on crypto and they have to take public money into retirement. The banks are trying to essential provide a cooling off period so regular people don't get obliterated. The same people that complain about the impinging government are usually the first to ask for a handout the moment something goes wrong etc etc.
- leoedin 4y agoSociety pick up the bill when they bet the pension on a legal and regulated gambling site too. Or when they bet it all on leveraged tech stocks. Why stop you doing one thing and not the others? I'm not particularly pro-crypto, but it's an interesting question that we haven't answered very well. It's clear to me that the state shouldn't stop you doing anything risky with your money - that also means stopping people starting businesses. But where do you draw the line? Problem gamblers often funnel every penny they have into betting sites - losing their house in the process. Wall street bets makes it clear that leveraged stocks can cause the same problems. Should we ban them too?
- voldacar 4y ago>The same people that complain about the impinging government are usually the first to ask for a handout the moment something goes wrong Really? This doesn't seem to match my experience.
- beardyw 4y agoLooking at the actual report, only Monzo and Revolut (yes, I haven't heard of them either) are "crypto friendly". The others could best be described as wary and watchful.
- mathieuh 4y agoMonzo and Revolut are well-known in the UK, I use Monzo myself and have for several years.
- shapefrog 4y agoRevolut sells crypto
- selfhoster11 4y agoMonzo has been known for freezing accounts at the drop of a hat in the past, possibly for cryptocurrency related reasons if /r/Monzo is to be believed. Revolut is not a good bank.
- Crosseye_Jack 4y agoWhile Monzo is cryptocurrency friendly [0] they don't allow payments to binance [1] however thats down to a Consumer warning on Binance from the FCA [2] so I think thats basically a industry wide thing not just a Monzo thing. Silly enough, if you have a paypal account and a PayPal debit card you can use that card on Binance. [0]: https://monzo.com/help/payments-getting-started/monzo-crypto-friendly https://monzo.com/help/payments-getting-started/monzo-crypto... (basically just says yes they are) [1]: https://monzo.com/help/payments-getting-started/binance-block-why https://monzo.com/help/payments-getting-started/binance-bloc... [2]: https://www.fca.org.uk/news/news-stories/consumer-warning-binance-markets-limited-and-binance-group https://www.fca.org.uk/news/news-stories/consumer-warning-bi...
- zarzavat 4y ago> This crypto ban by Starling comes off the heels of Santander’s decision to limit customer deposits to crypto exchanges to £1,000 per transaction and a monthly limit of £3,000 This, ironically, validates the argument for crypto that banks cannot be trusted to let you do what you want with your own money.
- automatic6131 4y ago>that banks cannot be trusted to let you do what you want with your own money. Well that's because we put them partially on the hook for when we, Joey Public, fall for scams, we expect and demand that the banks give us back the money we were scammed for. I mean, I personally haven't, but I've read multiple newspaper articles about it.
- Veen 4y agoIndeed. UK papers have had many stories of late about people sending their savings to scammers and then complaining their bank didn’t do enough to stop them, putting the bank on the hook for compensation because of the Quincecare duty of care.
- prohobo 4y agoDo you think that's a real problem, or a convenient (manufactured/inflated) problem? I'm pretty sure they could simply add to their terms of service "no refunds for crypto purchases" and that'd be understandable, legal, and enforceable. Advertising this position prominently would make naive crypto "dabblers" second-guess themselves. So, in my opinion the problem you're referring to is not real. There are no such limits/bans on gambling in general.
- quietbritishjim 4y ago> I'm pretty sure they could simply add to their terms of service "no refunds for crypto purchases" and that'd be understandable, legal, and enforceable. It definitely wouldn't work. I'm sure they have similar conditions for "don't read your PIN out on the phone" but people still do and still often get refunded for it.
- mjburgess 4y agoI first learned about blockchain years ago talking to some middle eastern clients who had implemented something with it. After looking at the technology from a data & software engineering pov, I thought it was basically useless and incredibly niche. I said as much, but they didnt believe me; they also thought ML was where you "fed data to a machine and it did everything" because that's what some lecturer had told them. For years I was mostly just confused that "crypto" was anything at all, and latterly it seemed pretty clearly insane. The pitch to replace governement-back currencies with deflationary tokens clearly a fever dream of some political moron. Then it became very clear that it was just a scam: the dream was the hook. And "tokens" fit the collectables mould, in which assets with only ephemeral value to collectors boom in speculative bubbles. Two years ago a friend wanted to get into the industry, and I said that soon it'll be a black mark on a CV and everyone will be hiding it. What is interesting is that amongst professional finance much of this has been apparent the whole time. I've spoken to senior people in UK banking and they've confirmed as much. And as much is clear by reading the FT. What is interesting is how much "elite tech" has captured the elite and silenced professional finance. The Economist article cited above, for example (and on HN the other day), was absurdly pro-crypto giving the scam-sales-pitch verbatim. Some documentary is no doubt in the works on this, and I can see an Adam-Curtis style one on "how silicon valley beat the financial elites and captured the political imagination of a generation"
- automatic6131 4y ago> I thought it was basically useless and incredibly niche Quite, I tried on and off for years to imagine a single use case for the real world. Always came up dry because the Blockchain Oracle problem is unsolvable.
- leoedin 4y agoMost of the highly technical software engineers I've spoken to have felt similarly. Blockchain is a neat solution to some very niche problems. However, there seems to be a middle ground of perhaps less technical people (the tech bros) who are attracted by the easy money and don't think too deeply about the underlying technical realities.
- isthisthingon99 4y ago
- petesergeant 4y agoI don't really understand this. I'm very, very bearish to all things crypto, but how is banks stopping their customers transferring money to crypto businesses meant to prevent risk to the banks itself?
- Gigachad 4y agoCustomers of a bank which blocks crypto will be less valuable targets for attacks since crypto is the easiest and fastest way to extract non refundable money from an account.
- elnr 4y agoWhen people are victims of fraud, the banks are generally expected to do something about it. I would conject that they may have had to refund too many people for crypto-related woes?
- shapefrog 4y ago"In recent years, “authorised push payment” (APP) scams, where a payer is deceived or defrauded into authorising a payment to a criminal, have increased both in value and volume, with many individuals suffering significant financial and emotional harm. ... which proposed introducing mandatory reimbursement for APP scams which occur over Faster Payments, as well as other measures to improve fraud prevention." If your bank is signed up to the voluntary Authorised Push Payment Scam Code which launched on 28 May 2019 it has to take a number of steps to protect their customers and reimburse customers who aren’t to blame. https://www.gov.uk/government/publications/government-approach-to-authorised-push-payment-scam-reimbursement/government-approach-to-authorised-push-payment-scam-reimbursement https://www.gov.uk/government/publications/government-approa...
- throwawycrptp 4y agoUK financial industry brings $100 billion dirty money a year into the country. If the banks support the crypto they can double that amount in short span of time. I think UK could do it.
- TacticalCoder 4y ago> UK financial industry brings $100 billion dirty money a year into the country. Official estimates says, depending on the source, that from 1.5% up to 5% of the world's GDP is tied to criminal activities. The GDP is about 100 trillion. Cryptos are a complete insignificant drop in the bucket. Even if 100% of cryptos were linked to crime, it's still be absolutely nothing compared to the actual criminal activities ongoing (like drug trafficking) and the percentage of the worldwide GDP they represent.
- TacticalCoder 4y ago> 47% of UK banks don’t allow customers to interact with crypto exchanges And yet the state asks you to pay your taxes when you make added-value on crypto. There are literally people who have taxes on added-value made on crypto due but are unable to pay them because their banks are refusing their money. Take 10 K EUR out: easy. Take 1 million+ EUR out: it's extremely difficult. The hypocrisy here is phenomenal: "cryptos are scams" / "cryptos are only for money laundering and drug dealing" / etc. But then: "don't forget to pay your taxes to the nanny state on your crypto winnings". And it's really vicious for the state says: "Oh, crypto went up 10000%, you hence have lots of taxes due to the state!" but the bank goes "Oh, you have a 7 digits sum in crypto, you must be a fraudster". Sneaky bastards.
- jarym 4y agoIs it really much different from the UK attitude to prostitution? Illegal to solicit but the actual act of exchanging money for sex is totally legal as long as it’s declared on taxes.
- TacticalCoder 4y ago> Is it really much different from the UK attitude to prostitution? It's actually quite similar I'd say. The hypocrisy behind that one is strong too.
- Melting_Harps 4y ago> It's actually quite similar I'd say. The hypocrisy behind that one is strong too. The City makes the rules, and it doesn't like competition in the only competitive sector they have left (finance), but you can rest assured they will get their cut while making it as difficult as possible for anyone to do so legally. I really want people to see the inherit hypocrisy of this system, people get riled up about woke-based politics which is decisive and ultimately effective at letting these type of brazen injustices continue unabated.
- 4y ago
- esja 4y agoA lot of mainstream banks felt uncomfortable about getting involved with crypto. But at the tail end of a monetary bubble when everyone is chasing yield, the pressure from your board, your major investors, and your trend-following employees can be impossible to resist. It's just easier to go with the flow. But after FTX, the hype is dead and they can quietly shelve their projects and move on. Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally. — John Maynard Keynes Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one. ― Charles MacKay
- bluescrn 4y agoThey've banned crypto, but actual gambling is more popular and more heavily advertised then ever
- dazc 4y agoThis may be true but some banks also do a lot to prevent it, such as a need to specifically request betting transactions to be allowed on your account. I also think that people losing money from betting actually know what they are getting into though. The same can not be said for some other transactions.
- bluescrn 4y agoThere's also all the 'near-gambling' of F2P games with gacha/lootbox systems, which has none of the regulation of 'real gambling'
- gambiting 4y agoGambling is a lot more regulated though. And it doesn't have the tendency to say "hey bet all of your life savings with us, you can't lose!" like crypto does.
- jakupovic 4y agoI logged into a gambling site and saw that you could make $5000 individual BlackJack bets. $5k a bet is a lot of money and gone in a second. This is not well regulated and needs help. With crypto you at least have some sh*tcoin left, with online casinos nothing.
- throwaway290 4y agoDoes the cryptocurrency industry also allow banning yourself from betting on it (and respect this ban by ensuring you don't create multiple accounts)? That's just one of the controls in place in gambling industry.
- bluescrn 4y ago
- varispeed 4y agoThis is a dangerous precedent of "legal, but harmful" creeping in, where you cannot spend _your own money_ on something authority thinks is not in your best interest.
- rvz 4y agoIt's like as if people commenting here want CBDCs and would love the banks to impose savings limits on their accounts and pretend that they know best what you should be spending your digital cash on. [0] [0] https://reclaimthenet.org/digital-euro-spending-saving-limits https://reclaimthenet.org/digital-euro-spending-saving-limit...
- tempera 4y agoThe most of people commenting here are payed to portray that a certain idea about how the future should be is well accepted by the majority of people. They are even from an military organization, running psyops. Public opinion must be managed on open forums and this how they do it. They have hundreds of accounts that play dialogues on important issues trying to manipulate public opinion.
- varispeed 4y ago*hundreds of thousands accounts
- throwawayben 4y agoUK Banks have always been very wary of crypto. It was always a worry that your account might get suddenly closed if you interacted too much with the crypto ecosystem
- rajman187 4y agoWill be interesting to see how former finance minister now PM reconciles the banks' hesitancy with his own grandiose plans of making the UK a crypto capital https://www.cnbc.com/2022/11/01/what-rishi-sunak-as-pm-means-for-the-uk-crypto-industry.html https://www.cnbc.com/2022/11/01/what-rishi-sunak-as-pm-means...
- rwmj 4y agoI think that plan will be quietly forgotten, to the relief of everyone who knew it was obvious nonsense when it came up first time.
- pibechorro 4y agoA friendly reminder that all the recent drama has zero to do with crypto, rather 100% to do with corruption at a human scale by 3rd party services which are not in any way crypto, they are traditional financial services peddling cryto wares. Get your keys off banks and 3rd parties, thats the whole point of why this started ... Exactly because of crooks like ftx and those peotecting them.
- cuteboy19 4y agoIn other words, real crypto hasn't been tried yet. We dismiss communists when they make such statements, why should we make an exception for crypto? Human factors are part and parcel of crypto. I don't think we can pretend that there exists a world where everyone just behaves properly despite every incentive to defraud people
- tatersolid 4y agoYour “no true crypto-bro” argument is unpersuasive. The entirety of cryptocurrency is based on selling later to greater fools, even for hodlers with hardware wallets.
- 36amxn35 4y agoYou have no idea what you're talking about.
- SilverBirch 4y agoI really don't understand what place your bank has telling you where you're allowed to send money. If I want to throw a small percentage of my net worth into a hugely speculative investment then fine, why are they stopping me? Are they stopping me from using my bank card down at the dog tracks or at a casino? Can I withdraw cash for Poker but not blackjack? Having said that, it's weird because I definitely have sent money from one of the banks that aren't crypto-friendly to Binance in the past, so who knows how strong these bans really are.
- rwmj 4y agoThis isn't about sophisticated investors wanting to bet 1% of their net worth on a speculative investment. It's about preventing ordinary people wiring their life savings to scams like OneCoin (https://www.bbc.co.uk/news/technology-49826161 https://www.bbc.co.uk/news/technology-49826161).
- lucozade 4y agoThere are various guarantees and payment codes of conduct that UK banks have signed up to. The intent of these is to give some protection if you've made a payment to a scammer. What I presume is happening is that some banks are seeing a significant increase in applications for that protection from crypto transactions. Or are expecting to see such. It doesn't apply when you withdraw cash as you have no recourse to protection from the bank if you subsequently lose that money. And you might be restricted from using you card at a casino if your bank has seen significant claims from said casino. One can, of course, argue whether or not such protections should exist. As in, run the retail banking system on a caveat emptor basis. But that's not how it works in the UK and, whilst it doesn't, it's not unreasonable for the bank's to limit their liability.
- frank_bb 4y ago
- vizzah 4y agoHow transacting through a bank to move money on/off crypto exchanges could be "risky" for the bank? Unless banks don't want account holders to spend (or lose) their money, to keep better balance sheets.. but banks shouldn't dictate what customers do with their cash. Exactly the reason customers want to be less dependent on high-street banks and keep their money/investments in a self-custody. Self-custody is the largest appeal of crypto currencies.