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NatWest introduces limits on crypto trading to prevent fraud

UK bank says its retail customers will benefit from daily and monthly limits on the amount they can pay into cryptocurrency exchanges

Retail bank NatWest is to implement daily and monthly limits on the amount of money customers may pay into cryptocurrency exchanges in an attempt to protect them from fraud and scams, and prevent them from losing “life-changing” sums of money.

Going forward, customers will only be able to transfer up to £1,000 daily, and up to £5,000 every 30 days. The bank said over £329m was lost by UK consumers to cryptocurrency scams in 2022, and it is likely that the cost-of-living crisis is driving growing amounts of fraud, with cyber criminals using promises of high returns to entice investors – men over 35 are considered most at risk.

Cryptocurrency scams often exploit a lack of understanding over how cryptocurrency markets work, and their inherent unpredictability, to convince victims to transfer money to accounts on legitimate exchange platforms. These accounts are often set up in victims’ names by the fraudsters or by the victims themselves under pressure.

“You should always have sole control of your cryptocurrency wallet – nobody else should have access. If you didn’t set the wallet up yourself or can’t access the money, then this is likely to be a scam,” said NatWest head of fraud protection Stuart Skinner.

“We have seen an increase in the number of scams using cryptocurrency exchanges and we are acting to protect our customers,” he added.

Some of the more common cryptocurrency scams include fake bitcoin investment schemes, where scammers claim to be investment managers asking for an upfront fee to begin trading with the promise of millions of pounds of potential returns, and rug-pull scams, which involve scammers promoting a new cryptocurrency or non-fungible token (NFT) project before absconding with the invested funds.

So-called pig butchering scams – which rely on social engineering, and are often romance themed, to lure victims – are also increasingly common.

Although the government plans to legislate to give the Financial Conduct Authority (FCA) regulatory powers over the promotion of certain crypto assets, the regulator’s current position is that such assets remain unregulated and carry a very high degree of risk, highlighted by the high-profile failure of several crypto firms in 2022.

The FCA has repeatedly warned that consumers should be prepared to lose all their money if they buy crypto assets, and moreover, are unlikely to be eligible for any compensation under the Financial Services Compensation Scheme if they do lose money.

If they choose to invest in spite of this guidance, NatWest set out three steps that crypto investors can take to reduce their chances of being caught up in a scam:

  • Never share the password to your crypto wallet with anybody, even if a contact or investor has told you they need it to deposit funds into your wallet.
  • Read all information slowly and do not allow anybody to rush you into making an investment due to the volatility of the crypto market. Doing so may also give you a good chance of spotting typos or grammatical errors on fake websites that may indicate they are scams being run from outside the UK.
  • Be extremely wary of giveaways. Social media platforms are awash with cyber criminals using fake messages and endorsements from legitimate companies and celebrities promoting crypto giveaways to fake accounts.

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