London-based challenger bank Kroo is banning customers from carrying out crypto transactions, saying cryptocurrencies are “increasingly being used by fraudsters as a way to scam people”.

Kroo is following in the footsteps of other challenger banks, Starling Bank and Chase UK, which have issued crypto bans. 

In an update to its Terms & Conditions, Kroo said:

“To help keep your account and money safe, we are introducing some restrictions to the type of payments you can make or receive with your Kroo account. 

“From 30 May 2024, we will no longer support bank transfers or card transactions associated with cryptocurrencies.

 “We have made this decision because cryptocurrencies are increasingly being used by fraudsters as a way to scam people.”

Kroo said it would decline payments being made to cryptocurrency asset providers and not process bank tansfers from senders related to cryptocurrency assets.

Banks have warned about a big increase in online fraud, with Lloyds last year saying cryptocurrency scams have increased by 23% in 2023 compared with the same period last year.

The Financial Conduct Authority (FCA) has warned of the danger of investing in cryptocurrencies and the risk of scams. 

It bagged around 150,000 customers in the first 12 months since launching the current account.

Last year it raised £2 million from investors in a crowdfunded capital-raising, which put a pre-money valuation on the bank of £120 million.