JPMorgan & Crypto Exchange Gemini End Banking Ties
- JPMorgan ended its banking relationship with Gemini, owned by the Winklevoss twins.
- Coinbase confirmed JPMorgan banking relationship is still in place.
- The crypto industry faces regulatory scrutiny and limited banking options in the US.
A reliable source states that JPMorgan, a prominent American bank, will no longer maintain its banking affiliation with Gemini, a cryptocurrency exchange owned by Cameron and Tyler Winklevoss.
The Wall Street Journal reported that JPMorgan added Gemini and U.S.-listed exchange Coinbase as clients in early 2020. However, a representative of Coinbase, headquartered in San Francisco, verified that their banking relationship with JPMorgan is still in place.
The recent move by JPMorgan to terminate its banking association with Gemini comes shortly after Silvergate Capital Corp (SI.N), a prominent lender in the digital asset industry, expressed concerns regarding its capability to maintain its operations, leading to a decline in the cryptocurrency markets.
After being shaken by several scandals and failures in the previous year, the cryptocurrency industry is currently confronting increased regulatory oversight and encountering more obstacles in obtaining banking services.
Gemini, which is overseen by the New York State Department of Financial Services as a trusted company, did not provide any comments when requested. Nonetheless, in a tweet posted after the article’s publication, Gemini stated that their banking relationship with JPMorgan is still functional, despite conflicting reports.
Losing JPMorgan as a banking partner may not have a significant impact on Gemini as they have other banking relationships, such as with State Street, as per their website. However, there has been no response from State Street when requested to comment.
Experts have cautioned that cryptocurrency companies in the United States may have limited choices when it comes to finding banking partners, as regulators have alerted banks to remain vigilant of any liquidity risks that may arise from their dealings with crypto clients.
In the previous month, the Federal Reserve, along with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, jointly stated that banks must possess strong measures to supervise funds deposited by entities associated with crypto assets.
Posted Date: July 8, 2023
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