JPMorgan Chase has reportedly frozen financial institution accounts linked to 2 venture-backed stablecoin startups after figuring out publicity to sanctioned and high-risk jurisdictions.
The accounts belonged to BlindPay and Kontigo, two stablecoin startups backed by Y Combinator that primarily function throughout Latin America, based on a report by The Data. Each corporations accessed JPMorgan’s banking providers by Checkbook, a digital funds agency that companions with giant monetary establishments.
Per the report, the freezes occurred after JPMorgan flagged enterprise exercise tied to Venezuela and different areas topic to US sanctions.
A spokesperson for JPMorgan reportedly mentioned the choice was not pushed by opposition to stablecoins themselves. “This has nothing to do with stablecoin corporations,” the spokesperson instructed The Data. “We financial institution each stablecoin issuers and stablecoin-related companies, and we just lately took a stablecoin issuer public,” the spokesperson added.
Associated: Strike CEO debanked by JPMorgan, Lummis sounds ‘Chokepoint 2.0’ alarm
Chargeback surge triggers JPMorgan account closures
Checkbook CEO PJ Gupta reportedly instructed The Data that BlindPay and Kontigo had been amongst a number of corporations linked to a surge in chargebacks that prompted the financial institution to shut accounts. Based on Gupta, the spike was pushed by speedy buyer onboarding. “They opened the floodgates and a bunch of individuals got here in over the web,” he mentioned.
The account freezes come as JPMorgan and Checkbook deepen their partnership. In November 2024, the 2 corporations introduced that Checkbook would be a part of the J.P. Morgan Funds Associate Community, enabling company shoppers to ship digital checks. Checkbook additionally expanded its B2B cost choices earlier in 2024, concentrating on sectors akin to authorized providers, authorities and banking.
As Cointelegraph reported, cryptocurrencies have gotten a core a part of the economic system in Venezuela as residents flip to digital property to defend themselves from a collapsing foreign money and tighter authorities controls.
Cointelegraph reached out to JPMorgan for remark, however had not obtained a response by publication.
Associated: JPMorgan exploring crypto-backed loans amid stablecoin push
Winklevoss accuses JPMorgan of retaliating in opposition to Gemini over criticism
In July, Gemini co-founder Tyler Winklevoss claimed JPMorgan Chase paused the crypto trade’s re-onboarding course of in response to his public criticism of the financial institution’s new information entry coverage. Winklevoss accused the financial institution of partaking in anti-competitive habits that might harm fintech and crypto corporations.
In the meantime, JPMorgan is weighing plans to supply crypto buying and selling, together with spot and derivatives merchandise, to its institutional shoppers as curiosity grows amid a extra favorable US regulatory surroundings.
Journal: When privateness and AML legal guidelines battle: Crypto initiatives’ unimaginable alternative