Coinbase Executives Calls for New Rules After JPMorgan’s Chase UK Bans Crypto Payments

Due to the alleged frequency of cryptocurrency scams and fraud, Chase UK will no longer allow consumers to use their debit cards or bank accounts to purchase crypto from October 16, making Coinbase executives sweat.

“If we suspect you’re making a payment related to crypto assets, we’ll decline it,” Chase said in an email to clients this week. “If you’d still like to invest in crypto assets, you can try using a different bank or provider instead — but please be cautious, as you may not be able to get the money back if the payment is related to fraud or a scam.”

The change affects roughly 1.6 million clients who use Chase UK, a digital bank launched in September 2021 by JPMorgan Chase, the world’s largest bank.

Following the revelation, Brian Armstrong, CEO of large cryptocurrency exchange Coinbase and one of the company’s Coinbase executives, had harsh words for authorities.

“Once in a while, we see a bank in the world that decides they want to de-platform the whole industry,” Armstrong said. “I don’t think that’s OK. I don’t think that’s the rule of things in our society. I think the government should decide what is allowed and what’s not. I hope that was a misunderstanding that will be clarified in the coming weeks.”

Armstrong advised that the United Kingdom’s government interfere in the prohibition to make the nation a centre for the crypto industry.

Chase UK’s decision to halt crypto transactions is related to the level of fraud found on its digital platform. According to the United Kingdom’s fraud reporting body Action Fraud, the United Kingdom lost $372.3 million to crypto fraud last year, signifying a 41% increase in crypto fraud.

Chase UK is not the only British bank seeking to safeguard its clients’ interests. The British bank NatWest announced in March that the rise in “crypto criminals” compelled the bank to limit the amount of crypto that customers could use for transactions on crypto exchanges, capping it at roughly $1,200 (£1,000) for daily transactions and around $6,100 (£5,000) for monthly transactions.

According to the blockchain analytics firm Chainalysis, global crypto crime has increased significantly in recent years and is expected to approach $20 billion by 2022. This is a sixfold surge in ransom attacks in only the previous year.

Earlier this month, Ethereum co-founder Vitalik Buterin became the latest victim of a crypto crime, with hackers stealing $700,000 from users’ crypto wallets by swapping his SIM card.