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Barclays has stopped UK customers from transferring funds to Binance after the Financial Conduct Authority’s ban last month.
Last month, the Financial Conduct Authority (FCA) banned Binance from operating in the United Kingdom. The financial watchdog said, “Binance markets limited is not permitted to undertake any regulated activity in the UK.”
Following this ban, Barclays, one of the biggest banks in the United Kingdom, has prohibited UK clients from sending money to the crypto exchange. The bank notified the customers on Monday that no credit or debit payments are allowed and this must immediately come into effect.
The bank said, “This action does not impact on the ability for customers to withdraw funds from Binance. The decision has been taken following the FCA warning to consumers.”
Lack of KYC and AML regulations for the crypto sector have left the UK lenders grappling whether they should encourage clients to move funds back and forth in crypto exchanges or not. A payments company executive that assisted Binance to the broader financial market before cutting ties with the group said that Binance was resistant to throwing human resources at compliance issues, although it talked a big game for Anti-Money Laundering (AML) and Know Your Customer (KYC) rules.
Last week, NatWest had to block payments to some cryptocurrency exchanges where fraud-related harms were higher for the customers. Global regulators have focused on controlling money laundering and terror financing through cryptocurrencies. Banks are placed at the heart of efforts to protect consumers from scams.
It is evident that banks are scrutinising payments by consumers to crypto exchanges. According to an FCA report, only five cryptocurrency exchanges have registered successfully with the regulatory body for AML monitoring. The report further revealed that approximately 2.3 million people in the region have cryptocurrencies who use offshore companies like Binance for their dealings. Since these companies do not have to register with FCA, there is a higher risk of criminal activities like money laundering and terror financing for the UK residents.