Coinbase CEO Criticizes Chase UK’s Crypto Transaction Ban

Key Takeaways

* Brian Armstrong condemns Chase UK’s decision to restrict crypto-related transactions

* The move prompts dialogue with UK officials regarding the country’s crypto policy

* The ban poses challenges for Coinbase’s expansion ambitions in the UK


Brian Armstrong, the Chief Executive Officer of the major United States-based cryptocurrency exchange, Coinbase, has expressed disapproval over Chase UK’s recent decision to halt all crypto-related transactions. Armstrong shared his criticism publicly through a post on X (formerly Twitter) on September 26, 2023, describing Chase UK’s move as “totally inappropriate.”

Reaction to Transaction Ban

Armstrong’s comments came in response to the news that Chase UK, a subsidiary of JPMorgan, has resolved to decline all customer transactions related to cryptocurrency, citing a high level of fraud associated with crypto transactions as the primary reason. The bank confirmed this stance to Cointelegraph on the same day. According to Chase UK, customers attempting to carry out crypto-related transactions will receive a declined transaction notification.

In his post, Armstrong urged crypto holders in the UK to close their Chase accounts as a form of protest against this restrictive measure. He also beckoned UK officials, including Prime Minister Rishi Sunak and Economic Secretary Andrew Griffith, to evaluate whether Chase UK’s actions align with the broader policy goals of the country concerning cryptocurrency.

Implications for Coinbase

This development could potentially hinder Coinbase’s aggressive expansion efforts in the UK and Europe. According to the official website of Coinbase, the platform supports transactions in the UK, alongside the US, Europe, and Canada. In April 2023, Coinbase had expressed its serious commitment to expanding its operations in the UK and Europe. This ambition, however, may face challenges given the restrictive stance of major financial institutions like Chase UK towards cryptocurrency transactions.

While the UK and European markets present significant growth opportunities for Coinbase, the firm has also been dealing with legal hurdles in the US. Notably, in June 2023, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase, alleging violations of securities laws.

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Australian Banks Ordered to Report Crypto Transactions

The Australian Prudential Regulation Authority (APRA) has reportedly ordered local banks to report on their exposure to cryptocurrency transactions in the wake of recent banking collapses, including the Silicon Valley Bank (SVB) and Silvergate failures. The regulator is seeking to obtain more information and insight into banking exposures to crypto assets and associated risks.

According to the Australian Financial Review, the APRA has instructed banks to improve their reporting on crypto assets and provide daily updates to the regulator. The agency has started requesting banks to declare their exposures to startups and crypto-related companies, citing three people familiar with the matter. The new measures are reportedly part of the APRA’s increased supervision of the banking sector, aimed at mitigating the risk of similar collapses occurring in Australia’s banking system.

The move comes in the aftermath of the collapse of global banks, including Credit Suisse and SVB, which have raised concerns over the stability of the financial system. On March 19, UBS Group agreed to buy Credit Suisse for $3.2 billion after the latter collapsed over the weekend. The banking sector has been facing pressure from investors and regulators to improve risk management and transparency.

Barrenjoey analyst Jonathan Mott reportedly warned that while the situation “remains stable” for Australian banks, confidence could be quickly disrupted, putting pressure on bank margins. The APRA’s increased scrutiny of cryptocurrency transactions is aimed at mitigating this risk, as the regulator seeks to gain a deeper understanding of the potential impact of crypto assets on the stability of the banking system.

The Australian government has been taking a cautious approach to regulating the cryptocurrency industry, with the Reserve Bank of Australia (RBA) recently stating that it has no plans to issue a digital version of the Australian dollar. However, the APRA’s move to increase reporting requirements on crypto assets suggests that regulators are taking a more active role in monitoring the sector.

In conclusion, the APRA’s decision to order local banks to report on cryptocurrency transactions reflects the growing concern over the potential risks posed by crypto assets to the stability of the banking system. While the situation in Australia remains stable, the recent collapses of global banks have highlighted the need for improved risk management and transparency in the financial sector. The APRA’s increased scrutiny of the crypto industry is a step towards achieving this goal, as regulators seek to gain a deeper understanding of the potential impact of crypto assets on the stability of the financial system.


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India’s Government Plans to Bar Cryptocurrency Transactions, but Allow Holding as Assets

India is planning to bar the use of cryptocurrencies for payments or transactions, but allow them to be held as assets such as gold, shares, and bonds, according to Reuters media outlets. - 2021-11-17T171352.077.jpg

People familiar with the government’s plan revealed that this approach would enable the Indian authorities to avoid a complete ban on crypto. 

Last week, India’s Prime Minister Narendra Modi chaired a meeting with government officials and the Reserve Bank of India (RBI) officials to discuss the future of cryptocurrencies amid concerns that unregulated crypto markets could become avenues for financing terror attacks and money laundering, people familiar with sources stated.

During the meeting, the union government and the Reserve Bank of India (RBI) officials seemingly were not on the same page about cryptocurrency – an industry that has been growing in India over the past few months.

RBI governor Shaktikanta Das reiterated the central bank’s worries about crypto and its craze in India despite being recognized as a currency. On the other hand, Modi’s government advocated for strong regulatory control on crypto-assets to avoid the negative use of crypto, rather than banning it completely.

People familiar with discussions at the meeting stated that the government views crypto as valuable assets and cannot be banned but instead find ways to regulate it. The government agreed that future actions towards crypto should be proactive, “progressive and forward-looking” as these digital currencies represent an evolving technology.

The sources revealed that details of a bill are being finalized and the cabinet could receive the proposed legislation in the next two or three weeks for its consideration. The government is also considering designating the Securities and Exchange Board of India (Sebi) as the market regulator, though such a decision has not been finalized.

So far, the Reserve Bank of India has been hesitant in accepting cryptocurrencies as part of payment and transaction system, expressing concerns over potential risks to capital controls, microeconomic and financial instability.

India’s Crypto Market Sees Significant Growth 

As reported by Blockchain.News, the Indian government had planned to ban crypto assets around the same time last year, but the outlook has changed since then.

Investments in crypto assets have skyrocketed and it is becoming increasingly popular among young people. According to the Chainalysis blockchain data platform, India’s cryptocurrency market was worth $6.6 billion in May 2021, compared with $923 million in April 2020.

The crypto community has made several representations to Indian authorities requesting them to classify cryptocurrency as an asset rather than a currency in order to gain acceptance and avoid a ban.

However, India’s central bank has repeatedly reiterated its strong view against cryptocurrency since it gained popularity in the country following the sudden boom in the prices of Bitcoin.

The RBI is majorly concerned about digital assets for their potential threat to the Indian rupee. If an increasing number of investors invest in cryptocurrencies rather than rupee-based savings such as provident funds, then demand for the Indian rupee will fall. This would hinder the ability of banks to lend out money to their customers.

Furthermore, since crypto assets are unregulated in the nation and are difficult to trace, the government would not be able to tax digital currency owners, thus posing a further threat to the rupee.

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US Treasury Department Proposes New KYC Requirements for Cryptocurrency Transactions

US crypto users seeking to transfer their assets from a cryptocurrency exchange to their own personal wallets will have to comply with a new KYC requirements under a regulation proposed by the Treasury Department. - 2020-12-19T153455.954.jpg

In an effort to address anonymous transfers of digital assets by bad actors, the US Treasury Department has launched a plan to require some crypto users to offer information about their identities. The new plan targets private accounts that allow the holder of a unique digital key to store crypto assets and transact with others directly without going through a financial institution. Such accounts are known as unhosted or self-hosted wallets – a form of software (thumb drive) on a user’s cellphone or computer. The wallets are not held on a bank or a registered exchange.

In the new proposed regulation, the Treasury Department requires banks and money service businesses such as popular crypto trading platforms like Gemini, Coinbase to verify the identities of self-hosted or unhosted wallet holders for any digital asset transaction that exceed $3,000.

Banks and crypto trading platforms would have to report any crypto transaction exceeding   $10,000 to the Financial Crime Enforcement Network (FinCEN) within 15 days.

Investors Embracing Digital Gold

This week for the first time, Bitcoin price has climbed to $20,000, before quickly surging to $23,000 yesterday. These are the latest in a series of significant milestones that have seen the price of the cryptocurrency rose by almost 400% since March. The current rally is impressive as investors looking to get higher returns have been moving to embrace the leading cryptocurrency this year in the wake of the COVID-19 pandemic.

Bitcoin’s recent embrace by institutional investors including PayPal has made people more confident about the cryptocurrency. Major institutional investors including billionaire Paul Tudor Jones, Square Inc., MicroStrategy, and others have been adding the crypto into the portfolios. The current rally validates longtime crypto bulls but also raises the question of whether this will end in tears. While the era of $20,000 might be temporary, the crypto asset is, more than ever before, here to stay.   

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