UK Banks Block 40% of Crypto Exchange Transfers, Policy Group Tells Parliament

A UK parliamentary policy group told lawmakers on Monday that roughly 40% of customer transfers from British bank accounts to registered cryptocurrency exchanges are being rejected or delayed, the first quantified estimate of the access problem since the Financial Conduct Authority's registration regime came into force. The figure emerged during an evidence session with the Crypto and Digital Assets All-Party Parliamentary Group, where representatives from three UK-registered exchanges testified that rejection rates have not improved since the FCA's 2023 deadline for registration. CoinGecko data shows bitcoin at $78,669, up 22.4% over the past seven days, suggesting the banking friction has not suppressed market demand.

What the testimony actually establishes

The 40% estimate comes from aggregated internal data shared by Coinbase UK, Kraken UK, and Bitstamp UK, the three largest FCA-registered venues by UK customer count. The exchanges said the blocks occur at the sending bank, not at the exchange, and that customers receive generic "fraud prevention" or "risk appetite" messages without specific reasoning. The FCA's register lists 42 registered cryptoasset firms; the testimony implies the access issue affects the majority of retail on-ramps.

Why the banks say they are blocking

Major UK banks including Barclays, Lloyds, and NatWest have previously cited the FCA's anti-money laundering supervision gaps and the Travel Rule's counterparty verification requirements. The policy group's written submission notes that the Joint Money Laundering Steering Group guidance, updated in December 2023, permits banks to decline transfers where they cannot verify the beneficiary virtual asset service provider, a condition most UK banks say they cannot meet for every registered exchange.

Who is affected and how

Retail customers attempting to fund accounts via Faster Payments or CHAPS report the highest rejection rates; corporate and high-net-worth clients using dedicated relationship managers face fewer blocks. The exchanges testified that rejected customers often migrate to unregistered offshore venues or peer-to-peer markets, which the FCA has warned offer no consumer protections. Total crypto market cap stands at $2.67 trillion with 24-hour volume of $126.1 billion, per CoinGecko, indicating global liquidity remains deep despite UK-specific frictions.

The procedural path ahead

The APPG will submit formal written evidence to the Treasury Committee's financial inclusion inquiry, with a deadline of September 15, 2026. The committee can summon bank CEOs and the FCA to explain the disparity between the registration regime's intent and the observed rejection rates. The FCA has not issued supervisory guidance on bank-exit risk since its 2023 "Dear CEO" letter; the testimony may prompt a new one. | Bitstamp UK | Yes | 40-48% | Lloyds, Santander, Revolut | The bottom line: UK banking access for registered crypto exchanges has not improved under the FCA regime, and the 40% rejection rate now sits on the formal parliamentary record with a September committee deadline that could force regulatory clarity.