A new survey by the UK Cryptoasset Business Council found widespread blocking and delays on transfers between UK bank accounts and crypto exchanges.
The report drew responses from 10 major UK-based centralised exchanges serving millions of customers and processing hundreds of billions of pounds.
Eight out of 10 exchanges reported a rise over the past year in customers experiencing blocked or restricted bank transfers.
UKCBC estimates that around 40% of attempted transactions to crypto exchanges are either blocked or delayed by banks.
One UK-founded exchange reported nearly £1 billion in declined transactions over the past year due to bank-side payment rejections.
Most high-street banks were found to impose strict limits or outright blocks on transfers to crypto exchanges.
Several challenger banks allow payments but apply tight caps or short-term limits.
The report said restrictions are often applied universally without distinguishing between FCA-registered firms and higher-risk platforms.
“We acknowledge that fraud is a legitimate concern but there is widespread concern that banks are using compliance as a proxy to hinder sector growth,”