Kroo Bank Bans Cryptocurrency Transactions Over Fraud Concerns

London-based challenger bank Kroo has announced that it will no longer allow its customers to carry out cryptocurrency transactions due to concerns over fraud. The decision comes in response to the increasing number of online fraud cases and cryptocurrency scams, with fraudsters exploiting digital assets to deceive unsuspecting individuals. The ban will come into effect on May 30th. This move by Kroo follows similar decisions made by other challenger banks, such as Chase UK and Starlink, who have also implemented bans on crypto transactions in order to address the rising issue of crypto fraud in the banking sector. The bank has updated its terms and conditions to reflect this new directive, stating that it is implementing restrictions on the types of payments that can be made or received with a Kroo account. As part of this initiative, Kroo will reject any payments made to cryptocurrency asset providers and will not process bank transfers related to cryptocurrency assets. This decision by Kroo aligns with warnings from other banks about the increasing prevalence of online fraud. Lloyds reported a 23% rise in cryptocurrency scams last year, prompting the Financial Conduct Authority (FCA) to caution against investing in cryptocurrencies and the risk of falling victim to scams. In December 2022, Kroo made waves with the launch of its current account product, which offered an interest rate of 4.35%. Within the first year of its launch, the UK-licensed banking institution attracted an estimated 150,000 clients. In 2023, Kroo reportedly raised £2 million through a crowdfunded capital raising, bringing the bank’s pre-money valuation to £120 million. The ban on cryptocurrency transactions is expected to not only hinder the adoption of cryptocurrencies but also reduce fraudulent activities within the crypto market, leading to a more secure ecosystem. This move by Kroo is likely to have a ripple effect across the cryptocurrency landscape, impacting both platforms and investors. Furthermore, it is anticipated that other fintech companies based in the UK will take note of Kroo’s decision and adjust their own strategies accordingly, reshaping the financial and broader tech sectors.