- UK bank TSB is banning its customers from buying crypto from Binance and Kraken.
- The bank claims the exchanges have low-security standards which enable scammers.
- Also, TSB claims it unsuccessfully tried to contact both exchanges to resolve the issue.
UK-based TSB Bank is taking measures to protect its customers from ‘excessively high’ risk associated with crypto trading. Specifically, the bank is restricting its customers from buying crypto using funds the bank manages.
The Sunday Times reported that TSB is in the process of banning its customers from buying crypto via Binance and Kraken crypto exchanges. Notably, TSB is a retail and commercial bank and a subsidiary of Sabadell Group. Also, the bank has a 5 million strong client base. As such, if the ban goes through this would be a significant blow to the two exchanges.
However, the bank cited low-security standards on both Binance and Kraken as the reason for the ban. TSB believes the low standards are aiding scammers to set up e-wallets on the exchanges. For instance, over a month, the bank reports it received 849 fraud claims from customers. These customers all claimed to have lost money to scammers using Binance wallet addresses.
TSB also claims that efforts to communicate with Binance exchange were unsuccessful. While Binance in turn denies receiving any communication from the bank. The exchange defended itself saying,
Binance is very serious about its responsibility to protect users from scams. When we are made aware of these claims, we immediately take action and have an excellent record of working with law enforcement agencies.
The issue is particularly difficult for TSB as the bank offers fraud protection services. The service obligations the bank to refund scam victims. To mitigate the rising number of fraud claims the bank even issued a crypto-related warning asking clients to be “extra vigilant when it comes to crypto investments.” The warning went on to advise traders not to engage with unsolicited contact. Particularly from so-called investment experts promising quick returns.