Gemini Denies JP Morgan Cut Their Banking Relationship
On Wednesday, March 8th, the Winklevoss twins’ Gemini Trust denied recent reports that their banking partner, JP Morgan Chase, cut their relationship. The US banking giant has been doing business with both Gemini and Coinbase for nearly 3 years since May 2020.
JP Morgan Chase Severs Ties With Gemini Trust?
This Wednesday, the digital assets company Gemini denied recent reports that American banking giant JP Morgan Chase cut their relationship. The bank initially offered its services to the cryptocurrency company in May 2020. JP Morgan has also been maintaining a relationship with Coinbase for nearly three years.
The news comes at a time when both Gemini and the wider cryptocurrency industry are faced with mounting issues. Throughout January, Gemini has been embroiled in a public feud with the Digital Currency Group over the funds stuck on Genesis since the November decision to freeze withdrawals. The issue started moving toward a resolution only recently after the DCG decided to sell its now-bankrupt subsidiary, Genesis.
For its part, JP Morgan Chase has proven somewhat ambivalent toward the digital assets industry. On the one hand, it is behind the banking world’s first digital currency, the “JPM Coin” and has recently unveiled its work on a web3 digital identity solution. On the other, the company’s CEO Jamie Dimon has been consistently critical of cryptocurrencies famously likening digital assets to “pet rocks”.
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Is Crypto Getting Debanked?
While Gemini’s relationship with JP Morgan may be intact, recent months have proven fairly rocking when it comes to banks’ engagement with the cryptocurrency industry. The collapse of FTX last November somewhat lessened the enthusiasm certain financial institutions had toward the sector with Signature Bank, for example, quickly announcing it is planning to reduce its exposure to digital assets.
The intent translated into action in late January when Signature notified Binance it would no longer be processing its users’ transactions worth less than $100,000. Still, the situation became even tenser in February. Late in the month, another crypto-friendly bank, Silvergate, revealed it would not be able to make its 10-K filing until further notice. The revelation caused the value of its shares to halve within 24 hours and led to a mass exodus of its partners from the digital asset industry.
Late last week, the bank announced it had decided to discontinue the Silvergate Exchange Network. Furthermore, Silvergate is now reportedly working on potential solutions to its problems with FDIC. Despite the adverse developments, several major banks are still broadly interested in the possibilities offered by blockchain technology with BNY Mellon, for example, calling digital assets its “longest-term play”.
Do you think the recent developments will cause the cryptocurrency industry to suffer from a drought of banking partners? Let us know in the comments below.