JPMorgan Chase has reportedly frozen bank accounts linked to two venture-backed stablecoin startups after identifying exposure to sanctioned and high-risk jurisdictions.
The accounts belonged to BlindPay and Kontigo, two stablecoin startups backed by Y Combinator that primarily operate across Latin America, according to a report by The Information. Both companies accessed JPMorgan’s banking services through Checkbook, a digital payments firm that partners with large financial institutions.
Per the report, the freezes occurred after JPMorgan flagged business activity tied to Venezuela and other locations subject to US sanctions.
A spokesperson for JPMorgan reportedly said the decision was not driven by opposition to stablecoins themselves. “This has nothing to do with stablecoin companies,” the spokesperson told The Information. “We bank both stablecoin issuers and stablecoin-related businesses, and we recently took a stablecoin issuer public,” the spokesperson added.
Related: Strike CEO debanked by JPMorgan, Lummis sounds ‘Chokepoint 2.0’ alarm
Chargeback surge triggers JPMorgan account closures
Checkbook CEO PJ Gupta reportedly told The Information that BlindPay and Kontigo were among several firms linked to a surge in chargebacks that prompted the bank to close accounts. According to Gupta, the spike was driven by rapid customer onboarding. “They opened the floodgates and a bunch of people came in over the internet,” he said.
The account freezes come as JPMorgan and Checkbook deepen their partnership. In November 2024, the two companies announced that Checkbook would join the J.P. Morgan Payments Partner Network, enabling corporate clients to send digital checks. Checkbook also expanded its B2B payment offerings earlier in 2024, targeting sectors such as legal services, government and banking.
As Cointelegraph reported, cryptocurrencies are becoming a core part of the economy in Venezuela as citizens turn to digital assets to shield themselves from a collapsing currency and tighter government controls.
Cointelegraph reached out to JPMorgan for comment, but had not received a response by publication.
Related: JPMorgan exploring crypto-backed loans amid stablecoin push
Winklevoss accuses JPMorgan of retaliating against Gemini over criticism
In July, Gemini co-founder Tyler Winklevoss claimed JPMorgan Chase paused the crypto exchange’s re-onboarding process in response to his public criticism of the bank’s new data access policy. Winklevoss accused the bank of engaging in anti-competitive behavior that could damage fintech and crypto firms.
Meanwhile, JPMorgan is weighing plans to offer crypto trading, including spot and derivatives products, to its institutional clients as interest grows amid a more favorable US regulatory environment.
Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice
