UK Banks Delay or Block 40% of Transactions to Crypto Platforms, Report Says

• Bank transactions between UK banks and crypto exchanges are being blocked.
• Delaying and blocking crypto transactions will slow user growth in the crypto sector.
• Banks need to avoid using blanket crypto regulatory policies.

According to a survey by the UK Cryptoasset Business Council (UKCBC), bank transfers between UK bank accounts and crypto exchanges are being blocked, delayed, or refused to scale, revealing a disparity between the acclaimed ambitions and the actual practice of the banking system’s treatment of the crypto sector.

80% of UK Exchanges Experience Banking Restrictions

The survey, which was titled “Locked Out: Debanking the UK’s Digital Asset Economy,” collated data from across 10 top centralized crypto exchanges in the UK, serving millions of customers, and with a transaction history of hundreds of billions of pounds. 

According to the survey’s report, 80% of the exchanges said the frequency of delays, blocks, and transaction restrictions has spiked over the past 12 months. Using the accumulated data, the UKCBC estimates that about 40% of attempted transactions to crypto platforms experience the cited hitches.

Related Article: Is the UK’s New Crypto Policing a Step Toward Regulation or Restriction?

Excessive Control Will Slow User Growth

Most investors see the delays, blocks, and restrictions experienced during crypto-related transactions as a crucial factor that could slow user growth and reduce onshore crypto activities. Despite the growing demand for regulated transactions, the ongoing situation suggests a counterproductive development that deflates the hopes of those who believed a regulated system would improve the crypto industry’s efficiency.

Details of the UKCBC findings reveal extreme control in the internal transaction processes by UK banks. Most of them impose strict limits or outright blocks on crypto-related transactions, including the enforcement of low caps or 30-day rolling limits.

Beyond Tackling Fraud

Considering the volume and rate of rejections experienced, most crypto industry representatives argue that fraud concerns alone could not be the reason for such a scale of restrictions. Despite acknowledging that fraud is a legitimate concern and cause for enhanced crypto transaction scrutiny, the industry reps think the banks are using compliance posture as a proxy to hinder the crypto sector’s growth.

Crypto advocates suggest that the banks should avoid using blanket regulatory policies and treat transactions on an individual basis. They also conversed for increased transparency, urging the banks to provide clear explanations whenever they block payments of restricted accounts.

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