JPMorgan Chase & Co. has reportedly frozen bank accounts associated with two venture-backed stablecoin startups after identifying exposure to sanctioned high-risk jurisdictions.
The Information reports that the accounts belong to BlindPay and Kontigo, two Y Combinator-backed stablecoin startups that operate primarily across Latin America. Both companies accessed JPMorgan’s banking services through Checkbook, a digital payments company that partners with major financial institutions.
The freeze occurred after JPMorgan reported business activities related to Venezuela and other regions subject to U.S. sanctions, according to the report.
A JPMorgan spokesperson reportedly said the decision was not prompted by opposition to stablecoins per se. “This has nothing to do with stablecoin companies,” a spokesperson told The Information. “We treat both our stablecoin issuer and stablecoin-related businesses as a bank, and we recently took our stablecoin issuer public,” the spokesperson added.
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JPMorgan account closures occur one after another due to rapid increase in chargebacks
Checkbook CEO PJ Gupta reportedly told The Information that BlindPay and Kontigo were among several companies involved in the surge in chargebacks that prompted banks to close accounts. According to Gupta, this spike was due to rapid customer onboarding. “They opened the floodgates and a lot of people came through the internet,” he said.
The latest account freeze comes as JPMorgan and Checkbook deepen their partnership. In November 2024, the companies announced that Checkbook would join the JPMorgan Payments Partner Network to enable business customers to send digital checks. Checkbook also expanded its B2B payment services in early 2024 to include sectors such as legal services, government, and banking.
As reported by Cointelegraph, cryptocurrencies are becoming central to Venezuela’s economy as citizens turn to digital assets to protect themselves from currency collapse and increased government regulation.
Cointelegraph reached out to JPMorgan for comment, but did not receive a response in time for publication.
Related: JP Morgan considers cryptocurrency-backed loans as it promotes stablecoins
Winklevoss accuses JPMorgan of retaliating against Gemini over criticism
In July, Gemini co-founder Tyler Winklevoss claimed that JPMorgan Chase & Co. had suspended the cryptocurrency exchange’s re-registration process in response to public criticism of the bank’s new data access policy. Winklevoss accused the bank of anti-competitive behavior that could harm fintech and cryptocurrency companies.
Meanwhile, JPMorgan is considering plans to offer crypto trading, including spot and derivatives products, to institutional clients amid growing interest amid a more favorable U.S. regulatory environment.
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