British Banking Giant Blocks Bitcoin and Cryptocurrency Transactions
The largest bank in the UK by assets is refusing to transact with cryptocurrency exchanges.
The Sunday Times reports HSBC will neither process cryptocurrency payments nor allow wallet-to-bank transfers.
The London-based newspaper adds that while other big banks accept cryptocurrency transfers from digital wallets to customers’ bank accounts, many will block credit card transactions if it involves buying or selling Bitcoin (BTC).
The news comes a few days after Bitcoin printed its all-time high of $41,941.
The Sunday Times explains that crypto investors who want to cash in on their profits must convert their holdings into fiat currency such as euro or sterling before the bank can accept the funds. Holders of digital assets run the risk of keeping their money in a crypto exchange unless they can find a bank that will accommodate their needs.
The report coincides with a warning from UK financial regulator, Financial Conduct Authority (FCA), that cryptocurrency investors are at risk of losing their entire investments.
“Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money. If consumers invest in these types of product, they should be prepared to lose all their money.”
In October, the FCA banned the sale of crypto-derivatives to retail consumers.
“The FCA considers these products to be ill-suited for retail consumers due to the harm they pose. These products cannot be reliably valued by retail consumers because of the:
- inherent nature of the underlying assets, which means they have no reliable basis for valuation
- prevalence of market abuse and financial crime in the secondary market (eg cyber theft)
- extreme volatility in cryptoasset price movements
- inadequate understanding of cryptoassets by retail consumers
- lack of legitimate investment need for retail consumers to invest in these products.”
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