Cryptocurrency exchange Kraken voices concern over banking restrictions, specifically addressing the ban imposed by Metro Bank
In the ever-evolving world of finance, a significant shift has been observed in the U.K., with major banks, including Metro Bank and Chase UK, imposing restrictions on crypto transactions. This trend, part of a broader de-banking of crypto, is driven by a combination of regulatory guidance and tightening legislative frameworks.
Metro Bank announced that outbound payments to known crypto exchanges will not be processed starting from November 2024. This restriction applies to all banking products and payment methods at the bank. The reason behind this decision is the high levels of fraud associated with paying money to crypto exchanges, with at least $24.2 billion in fraud occurring in the crypto world in 2023, according to Chainalysis.
NatWest, another U.K. bank, limits daily outbound payments to crypto exchanges to £1,000 and £5,000 over 30 days. However, no major U.S. bank has an outright ban on sending money to crypto exchanges.
The Federal Deposit Insurance Corporation (FDIC) has expressed concern about the rapidly evolving crypto industry and the risks associated with it. In 2022, redacted letters from the FDIC called for a "pause" on bank-crypto activity. The FDIC supports innovations that are safe, sound, compliant with laws and regulations, and fair to consumers.
Regulatory frameworks are evolving, with the GENIUS Act, signed in July 2025, imposing strict rules for payment stablecoins and crypto-related service providers. Crypto exchanges, custodians, and wallet providers must comply with these standards within a three-year transition period, limiting crypto activities to approved payment stablecoins after July 18, 2028. This regulatory tightening increases banks’ compliance burdens and risks, prompting some to restrict payments to crypto platforms to avoid potential regulatory violations or operational risks.
Kraken, a crypto exchange regulated in the U.K. by the Financial Conduct Authority, adheres to a heavy burden of regulation and compliance to protect customers. Kraken UK's general manager, Bivu Das, believes that a one-size-fits-all approach to restricting crypto transactions is not appropriate. Das believes that these restrictions are not right, as they are banks telling customers what they can and can't do with their own money.
In conclusion, the bans on outbound payments to crypto exchanges by banks like Metro Bank are a complex response to regulatory guidance focused on risk mitigation, tighter legislative frameworks like the GENIUS Act, and the FDIC’s cautious approach to crypto activities within banking organizations. As the crypto bull market continues, this trend of restricting crypto transactions is expected to grow.
[References] [1] Joint regulatory guidance issued by the Federal Reserve, OCC, and FDIC (July 2025) [2] The GENIUS Act (July 2025)
Technology plays a crucial role in the decision-making process of banks when it comes to crypto transactions. For instance, Chainalysis's technology helps in identifying high levels of fraud associated with paying money to crypto exchanges, leading to restrictions on outbound payments by banks like Metro Bank.
The FDIC also acknowledges the importance of technology in safeguarding the crypto industry, stating that innovations should comply with laws and regulations, ensuring they are safe, sound, and fair to consumers. However, the rapid evolution of technology in the crypto space poses challenges for regulatory bodies, as seen with the need for strict rules and standards imposed by acts such as the GENIUS Act.
