- It is the latest in the increasing walk-backs by major banking players from supporting crypto firms.
- Gemini was onboarded by JPM in 2020.
Enjoy your financial freedom with Uphold
Get a welcome bonus of $50 when you sign up and trade at least $600 of your favorite asset
The gap between cryptocurrency firms and the banking sector is widening, cutting off an essential component in that sector – off-ramping digital assets for fiat currency – amid increasing regulatory pressure.
JPMorgan, the largest US bank, is cutting ties with popular crypto exchange Gemini, according to sources who shared information with the Wall Street Journal. Although the reason for the walk-out remains unclear, numerous other banks are taking similar steps.
Last week, Silvergate, another crypto-friendly financial institution, announced that it was closing down its Silvergate Exchange Network – a settlement tool for the bank’s customers and several crypto firms. Another bank also big on digital assets, Signature Bank, recently ended support for Binance’s transactions of less than $100,000, locking out most of the exchange’s retail clients. The trend is now spreading to the seemingly regulated crypto exchanges.
More banks are ditching crypto
Gemini, owned by the billionaire twin brothers Cameron and Tyler Winklevoss, was onboarded by JPM in 2020 to operate accounts that offer cash management services and handle dollar transactions for US clients. The accounts, however, did not process cryptocurrency transactions on behalf of the exchange. Coinbase also joined the bank almost at the same time.
Gemini received a trust charter in 2015 from the New York State Department of Financial Services, while rival Coinbase has a BitLincese to operate crypto businesses, with registration from the Financial Crimes Enforcement Network. All the licensing was part of
JPM’s requirement to onboard the exchanges.
Regardless, the US regulators have warned the banking sector against having significant exposure to crypto. On Monday, the White House acknowledged the problems surrounding Silvergate, reiterating its commitment to protecting everyday consumers.
‘‘In recent weeks, banking regulators have released guidelines on how banks should protect themselves from risks associated with crypto. As you know, the president has repeatedly called on Congress to take action to protect everyday Americans from the risk posed by digital assets, and he will continue to do so,’’ White House press secretary Karine Jean-Pierre said.
Start buying crypto in 3 simple steps
Buy, sell, and trade 250+ cryptos with low fees