Chase UK, the digital banking subsidiary of JPMorgan Chase (NYSE:), earlier this week announced its decision to block cryptocurrency transactions. The bank will no longer allow its customers to purchase cryptocurrencies using its debit cards or through bank transfers, citing an increase in fraud related to digital currencies.
Coinbase (NASDAQ:) CEO Brian Armstrong expressed his dissatisfaction with Chase UK’s decision in an interview with CNBC’s “Squawk Box” on Thursday. Armstrong criticized the action as an attempt by private companies to “de-platform” the crypto industry. He suggested that such decisions should fall under the purview of the government rather than individual companies.
Armstrong’s sentiments come at a time when Coinbase, according to InvestingPro data, has a market cap of 17.93B USD and has seen a 5.92% increase in its 1-week price total return. However, the company has been grappling with a declining trend in earnings per share and has seen 2 analysts revise their earnings downwards for the upcoming period, as per InvestingPro Tips.
Chase UK’s move is not unprecedented among British lenders. Other banks such as NatWest and HSBC have also implemented restrictions on cryptocurrency transactions due to similar concerns over fraud. NatWest has set limits on the amount of cash that can be sent to crypto exchanges, while HSBC has prohibited crypto purchases entirely.
The decision by these banks comes in light of data from Action Fraud, the U.K.’s fraud reporting agency, which shows a 40% increase in consumer losses to crypto fraud over the past year, exceeding £300 million for the first time.
Proponents of cryptocurrencies argue that the industry has matured significantly since the collapse of FTX and other scandals. They suggest that cryptocurrencies could become part of everyday payments and trading in a legitimate manner. Coinbase, for instance, despite having a negative P/E ratio of -13.44 and a revenue growth of -55.34%, according to InvestingPro, remains one of the leading platforms for cryptocurrency transactions.
In response to these developments, the U.K. government is working on legislation that would regulate retail trading in crypto assets. The Financial Services and Markets Bill is one such example which includes provisions on cryptocurrency. Economic Secretary to the Treasury Andrew Griffith stated in an interview with CNBC’s Arjun Kharpal that a crypto-specific law could be passed by April 2024.
Armstrong acknowledged the U.K.’s ambition to become a “Web3 and crypto hub,” but expressed disappointment with Chase UK’s stance. He hopes that the bank’s decision will be clarified in the coming weeks.
While the U.K. is working towards crypto-friendly regulations, the U.S. has taken a stricter approach with its regulators stepping up enforcement action against cryptocurrency firms. As the crypto industry navigates these regulatory waters, investors are advised to stay informed about market trends and company performance. For more insights and tips, check out InvestingPro, which offers a wealth of real-time metrics and tips on companies like Coinbase.
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