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The Daily Telegraph - Your Money - - MONEY -

nen­force­able” bans by banks on cryp­tocur­rency pur­chases fail to pro­tect con­sumers and ap­pear to put lenders’ in­ter­ests first, ex­perts have said. Lloyds Bank­ing Group, which in­cludes Lloyds, Bank of Scot­land, Hal­i­fax and credit card provider MBNA, said in Fe­bru­ary that it was ban­ning the pur­chase of cryp­tocur­ren­cies via its credit cards.

The ban was in­tro­duced to pro­tect the group’s 30 mil­lion cus­tomers from wild price swings in dig­i­tal currencies such as Bit­coin, which soared in value last year to roughly $20,000 (£15,700) each but has since plum­meted to less than $4,000. Credit providers in Amer­ica also im­ple­mented bans, while in Bri­tain, Vir­gin Money fol­lowed suit.

How­ever, the banks are strug­gling to keep pace with the rapid rise in cryp­tocur­rency ex­changes and spread bet­ting web­sites that ad­ver­tise dig­i­tal cur­rency in­vest­ments, it has emerged.

There is no one spe­cific and recog­nised in­dus­try trans­ac­tion code for cryp­tocur­rency and it de­pends

Harry Brennan

on whether the ven­dor is listed on a bank’s “black­list” for trans­ac­tions to be blocked. These lists are mon­i­tored and up­dated man­u­ally on an ad hoc ba­sis and in­clude some of the bet­ter known ex­changes such as Coin­base, Tele­graph Money un­der­stands, but are far from fool­proof.

The hys­te­ria sur­round­ing Bit­coin in par­tic­u­lar has led to the rise of in­vest­ment scam­mers who use fake web­sites and trad­ing com­pa­nies to con peo­ple out of their sav­ings, mak­ing the sec­tor even harder to po­lice. As a re­sult, some trans­ac­tions have man­aged to slip through the net.

Michael Mer­ri­man, 77, one of roughly three mil­lion MBNA credit card cus­tomers, lost about £30,000 to a sus­pected crypto scam af­ter some­one cold-called him and per­suaded him to buy dig­i­tal currencies through AAA Trade, a spread bet­ting web­site. The site is au­tho­rised in the EEA (Euro­pean Eco­nomic Area) and in­vites peo­ple to “join the crypto rev­o­lu­tion” by al­low­ing them to buy and sell more than 50 dif­fer­ent dig­i­tal currencies through its plat­form. Mr Mer­ri­man made a num­ber of de­posits on the site

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