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, in accordance with a report by The Info. Each firms accessed JPMorgan’s banking providers by Checkbook, a digital funds agency that companions with massive 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 firms,” the spokesperson instructed The Info. “We financial institution each stablecoin issuers and stablecoin-related companies, and we just lately took a stablecoin issuer public,” the spokesperson added.
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Chargeback surge triggers JPMorgan account closures
Checkbook CEO PJ Gupta reportedly instructed The Info that BlindPay and Kontigo have been amongst a number of corporations linked to a surge in chargebacks that prompted the financial institution to shut accounts. In accordance with Gupta, the spike was pushed by fast 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 firms introduced that Checkbook would be a part of the J.P. Morgan Funds Accomplice Community, enabling company shoppers to ship digital checks. Checkbook additionally expanded its B2B cost choices earlier in 2024, focusing on sectors equivalent 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 belongings to protect themselves from a collapsing forex and tighter authorities controls.
Cointelegraph reached out to JPMorgan for remark, however had not obtained a response by publication.
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Winklevoss accuses JPMorgan of retaliating towards Gemini over criticism
In July, Gemini co-founder Tyler Winklevoss claimed JPMorgan Chase paused the crypto alternate’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 participating in anti-competitive conduct that might injury 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 setting.
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