The company, which has 5.4m customers, is the latest British bank to crack down on financial cyber-crime following temporary moves by Barclays, Monzo and Starling to block transfers of cash to cryptocurrency trading platforms such as Binance in recent weeks.

It is understood that TSB will look to block crypto purchases where it spots fraudulent abuse of trading platforms and that a ban will be introduced within weeks.

A spokesman for the bank said: “We take our obligation to protect customers extremely seriously and continually review merchants and websites with excessively high fraud rates.”

TSB’s decision follows concerns over financial scammers duping customers and using trading platform accounts to transfer their victims’ cash into untraceable cryptocurrency, The Times reported.

The bank estimates that around one in eight payments to crypto trading platforms ended up with fraudsters, compared with one in 5,500 involving non-crypto transfers.

TSB said around two thirds of all crypto frauds hitting its customers were linked to the Binance platform, with 849 instances of customers losing money to scammers with Binance accounts in a single month between March 15 and April 15.

The bank also claimed that Binance “hardly ever” replies to reports of customer fraud. The Cayman Islands registered company, which was unavailable for comment, denied this and told the Times it was “very serious” about its responsibility to protect users from fraud

Concerns also focused on another platform, Kraken, whose global head of compliance Steven Christie, said: "We categorically deny the allegation that Kraken does not respond to calls for assistance on incidents of fraud.”

TSB’s move follows Financial Conduct Authority figures showing 2.3m adults in the UK, or 4.4pc of the population, now own digital currencies such as Bitcoin, up from 1.9 million in 2020.

The average amount of cash cryptocurrency buyers tie up in digital coins has increased to £300, up from £260 the year before, as asset values have increased.

Some one in seven of investors used some form of borrowing, such as a credit card, overdraft or family loan, to invest but the level of understanding over cryptocurrencies has decreased, the watchdog said.

Volatile price swings have seen the value of Bitcoin sink by almost half from its record high in April above $63,000 and last month, Andrew Bailey, the Bank of England Governor, told consumers investing in cryptocurrencies that they should be prepared to lose all of their money.