Kroo, a London-based digital bank, has announced a new policy prohibiting its customers from conducting cryptocurrency transactions, effective May 30. This decision comes in response to the growing number of online fraud cases and scams associated with cryptocurrencies.

Under the bank's updated terms and conditions, Kroo will restrict accounts engaging in cryptocurrency-related activities, including purchasing or trading cryptocurrencies and receiving credits resulting from cryptocurrency trading or transactions. If such activity is detected, the bank will not process the payments involved, and persistent engagement in such transactions may lead to the closure of the account. Additionally, Kroo reserves the right to freeze accounts suspected of crypto use.

Beginning May 30, 2024, Kroo will cease to support bank transfers or card transactions associated with cryptocurrencies.

Kroo, a challenger bank seeking to compete with established financial institutions, joins other UK challenger banks, such as Starling Bank and Chase UK, in implementing bans on cryptocurrencies.

The move by Kroo reflects a broader trend among global banks, many of which have expressed concerns about the safety and security risks associated with cryptocurrencies. Some argue that cryptocurrencies are not as anonymous as commonly believed.

In February, the Central Bank of Russia revealed that nearly half of the financial fraud schemes in the country in 2023 involved the use of cryptocurrencies and foreign currencies for payments.

Similarly, authorities at the Federal Reserve in the United States have cautioned about the potential for fraud and scams associated with cryptocurrencies, especially as banks consider embracing crypto and adopting Central Bank Digital Currencies (CBDCs).