Crypto Purchases With Credit Cards Banned By JP Morgan, Bank of Americabr>
JP Morgan Chase, Bank of America, and Citigroup have placed a ban on cryptocurrency transactions via credit cards.
JP Morgan enacted the ban on Saturday, saying the bank doesn’t want the credit risk associated with the transactions. “At this time, we are not processing cryptocurrency purchases using credit cards due to the volatility and risk involved,” a JP Morgan Chase spokesperson said in a statement. “We will review the issue as the market evolves.”
Bank of America started declining credit card transactions with known crypto exchanges on Friday. The Bank of America ban is limited to credit cards, and will not impact customers who wish to purchase cryptocurrencies using debit or ATM cards. The bank cited anti-money laundering regulations for the move, as well as the potential for thieves to convert stolen credit cards into cryptocurrency stashes.
Citigroup also said it will halt purchases of cryptocurrencies on its credit cards. “We will continue to review our policy as this market evolves,” company spokeswoman Jennifer Bombardier said.
Credit card providers which allow transactions with crypto exchanges could be left exposed to higher risk than usual because of the massive volatility of bitcoin and other cryptocurrencies.
Last week, Coinbase, the largest US exchange, told its customers that banks were starting to classify any cryptocurrency purchases as “cash advances,” which often carry a higher charge than regular goods and service purchases.
Over the past year, bitcoin has surged more than 900%, reaching highs of $20,000. On Friday, however, bitcoin fell below $9,000 for the first time since November. The decline occurred amid escalating regulatory threats around the world, fear of price manipulation, and Facebook’s ban on ads for cryptocurrencies and initial coin offerings (ICO).