One of the UK’s largest financial institutions, Lloyds Bank, reportedly locked a customer’s account over cryptocurrency-related activities – and it isn’t the first time it has done this.
Founded in Birmingham in 1765, Lloyds Bank is one of the oldest and largest financial institutions in the UK. It is one of the “Big Four” clearing banks and services more than 16 million customers across England, Scotland, Ireland, and Wales.
One of those customers, a Reddit user named matcheek, posted last week about how Lloyds Bank locked his account not once, but twice, in the span of two days because of cryptocurrency purchases he made.
The post was deleted from the r/Cryptocurrency subreddit for unknown reasons, but Micky contacted the Redditor, who was able to provide details about the incident.
“I bought some crypto recently. The test a new exchange have made a small transaction and bank blocked the transfer. I called the bank. They asked me a few questions, put me on hold for 10 minutes and lifted the lock,” he explained.
“But the previous transaction was just to test the waters. The day after I put another order for more crypto. Bank locked my account (not just the card) again but this time it was a 2nd level fraud suspicion – needed to physically go to the bank to unlock it.”
Interrogation over crypto activities
When matcheek visited his local Lloyds Bank branch to clear up the matter and unlock his account, he found himself subjected to what amounted to an interrogation regarding his crypto activities.
These are just some of the questions that matcheek had to answer in order to be able to regain access to his funds:
- Are you aware of the fraud taking place in the cryptocurrency market?
- Is there any particular reason you are taking the risk with your savings by transferring them to such a low credibility merchant?
- Have you bought cryptocurrencies before?
- How much did you give them?
- Who are you going to transfer the money to? Do you know the name of the company?
The account was eventually unlocked, but only after matcheek was forced to justify how he chose to spend his own money.
A pattern of targeting crypto users
In December of last year, Twitter user TerryV revealed his own struggle with Lloyds Bank, noting that it closed six of his bank accounts due to his crypto trading activities.
It’s a joke #lloyds bank closed 6 of my accounts because of crypto and now I’ve had some silly offer of £500 for inconvenience now I’m going to the press Re just corrupt all the managers are some big home truths to come out
— TerryV (@TerryV64080607) December 26, 2019
“It’s a joke #lloyds bank closed 6 of my accounts because of crypto and now I’ve had some silly offer of £500 for inconvenience now I’m going to the press Re just corrupt all the managers are some big home truths to come out,” he tweeted.
@CardanoBuzz recounted a similar experience on Twitter in May of last year. In his instance, a bank representative actually called him a gambler because he traded crypto.
That sucks. I had a HUGE issue last year with Lloyd’s bank. One advisor called me a ‘gambler’ for trading crypto and the FTSE 100. Took great delight in pointing out I was trading based partly off Lloyd’s share price and the apology letter & compensation was even better.
— CardanoBuzz – BUZZ pool ???????? (@CardanoBuzz) May 14, 2019
“That sucks. I had a HUGE issue last year with Lloyd’s bank. One advisor called me a ‘gambler’ for trading crypto and the FTSE 100. Took great delight in pointing out I was trading based partly off Lloyd’s share price and the apology letter & compensation was even better,” he explained.
Another user, @Crypto_SI, revealed that the bank closed his account too.
“Lloyds bank (UK) closed my account for dealing with crypto,” he said.
Lloyds Bank already banned credit card crypto purchases
Unfortunately, these incidents appear to be just the latest in a series of restrictive policies aimed at cryptocurrency users.
In February 2018, the bank announced that customers would no longer be allowed to purchase Bitcoin and other cryptocurrencies with credit cards.
A spokesperson for Lloyds Bank told CNBC: “Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies.”
According to reports, the bank cautioned its 9 million credit cardholders, warning them that any attempt to buy digital currencies would be summarily blocked.
A representative of the bank said at the time that the decision was made to “protect customers” from unaffordable losses and noted that customers could still purchase cryptocurrencies using debit cards.
Looking at recent actions the bank has taken against its crypto trading customers, the latter may not be entirely true.
Micky has reached out to Lloyds Bank about this latest incident and for clarification on its policies regarding cryptocurrencies but has yet to receive a reply.
Are (or were) you a Lloyds Bank customer? Have you ever run into problems with your account over crypto? Follow us and let us know on Twitter.