HSBC has been widely criticised for their decision to drastically reduce the amount of money customers can invest in cryptocurrency exchanges. In a memo, they warned customers of the increase in crypto scams, and the risks involved in investing in cryptocurrency assets. The Financial Conduct Authority (FCA) has highlighted that this type of investment carries a very high risk, and that any money held in crypto wallets is not protected by the Financial Ombudsman Service and Financial Services Compensation Scheme.
From August 29, HSBC customers will be subject to a £2,500 single transaction limit and a total of £10,000 within a 30-day rolling period. This limit is lower than that of many other high street banks, some of which do not permit any payments to crypto exchanges at all.
Fintech expert Stefania Barbaglio, founder of Cassiopeia Services, believes that this is reminiscent of banks’ attempts to suppress cryptocurrency and alienate customers. She stated that banks often view crypto as a scam, and don’t acknowledge its revolutionary potential, which has allowed people to monetise assets and has opened up new opportunities for entrepreneurs and businesses.
Sean Kiernan, CEO of digital merchant Greengage, commented on this issue, explaining that high street and challenger banks see risks in acting as fiat currency on and off ramps for crypto trading. He highlighted the potential for money laundering and fraud, and the bank’s potential liability for client losses.
