The bank said the restrictions would protect customers from life-changing transfers of funds to crypto assets.

NatWest, a prominent financial institution based in the United Kingdom, has restricted the funds its clients can use to buy cryptocurrencies in a bid to reduce their exposure to the volatile asset class.

According to Bloomberg, NatWest account holders are now limited to £1,000 ($1,215) per day or £5,000 ($6,090) every 30 days on transfers to cryptocurrency exchanges.

NatWest restricts customers’ crypto activity

NatWest, the U.K.’s third-largest bank by market value, said the decision would prevent its customers from “losing life-changing amounts of money” in crypto investments and scams.

The bank revealed that fraudsters used false promises of high returns to lure investors, taking advantage of their lack of knowledge about cryptocurrencies and their volatility to lure them into transferring funds to cryptocurrency exchanges.

Stuart Skinner, head of fraud protection at NatWest, noted that the increase in the number of scams carried out through cryptocurrency exchanges has forced banks to impose restrictions as the company works to protect its customers.

"Criminals exploit a lack of understanding of how cryptocurrency markets work and their unpredictability to encourage investors to move funds to exchanges, which are often set up by criminals or victims under duress from criminals in the customers' own names," NatWest said in a statement.

Meanwhile, this is not the first time the bank has imposed such restrictions on its users. In June 2021, NatWest temporarily limited the amount of money customers could send to cryptocurrency exchanges due to a rapid increase in investment scams and fraud.

At the time, NatWest also blocked transfers to several crypto companies that showed signs of causing fraud-related harm to its users.

UK banks impose restrictions on crypto spending

It is worth noting that NatWest is not the only UK bank to impose restrictions on its customers recently. Earlier this month, several major banks have banned or imposed higher crypto spending limits on user accounts.

HSBC recently banned users from buying cryptocurrencies with their credit cards, citing possible risks, while Nationwide Bank imposed a daily limit of 5,000 pounds ($6,090) on all digital asset debit card purchases.