UK Barclays Bank Restricts Customers from Sending Funds to Binance Exchange

UK’s Barclays bank has suspended debit and credit card payments to Binance cryptocurrency exchange, claiming that it reached such a decision after obtaining notice from the financial services regulator.

Barclays, the London-based financial institution, sent text messages on Monday, July 5, to its customers informing them about the announcement.

"As you've made a payment to Binance this year, we wanted to let you know that we're stopping payments made by credit/debit card to them until further notice. This is to help keep your money safe," the bank stated.

On June 26, the UK’s Financial Conduct Authority (FCA) banned Binance from offering its cryptocurrency derivatives in the UK markets and ordered the crypto exchange to suspend any of its regulated business operations in the country. The agency cited that digital asset exchanges are prohibited from doing cryptocurrency businesses in the United Kingdom.  

Binance stated that the financial regulator’s notice had no direct impact on its online platform's crypto services during that time.

However, experts have argued that the move is part of a wider crackdown by regulatory authorities, as governments take action against crypto trading services.

Meanwhile, Barclays’ customers have turned to Twitter social media to express their dissatisfaction over the abrupt ban, while some claimed to cut off their accounts. 

Authorities Clamp Down Crypto Exchanges

Recently, regulators across the globe are working to control the money that passes between crypto-assets and traditional financial systems to help banks protect clients from fraudulent activities and prevent money laundering.

The move by Barclays comes at a time when authorities in the UK are working on the extent to which customers can transfer money to and from cryptocurrency exchanges due to the lack of sufficient regulatory oversight over the crypto industry and concerns about compliance standards that vary significantly between exchanges.

For those current issues that Binance is facing, banks are making efforts to scrutinise the flow of customers’ funds into exchanges. So far, only five crypto firms have successfully approved and registered by the UK’s regulator by overseeing money laundering prevention, while the majority are still waiting for their approval.

According to regulators’ data, about 2.3 million customers hold crypto assets across the UK, with most people utilising offshore exchanges like Binance to trade such tokens. Such global platforms usually do not require registering with the regulator, even if they have customers from the UK.

However, adding restrictions and blockage to certain firms is set to lower the number of funds customers can transfer to exchanges.