Cryptoraves, a company that is working on the tokenization of social media, had its bank account shut down last month by JP Morgan, not long after news of JPM Coin broke. Eventually, the crypto startup was told that they were working in a “prohibited industry,” but they couldn’t get more details than that.
Account Closed One Day After Launching JPM Coin
Meanwhile, JPM Coin is a blockchain solution, and JP Morgan itself works in digital currencies for some clients.
Nevertheless, the bank told Cryptoraves:
Join CCN for $9.99 per month and get an ad-free version of CCN including discounts for future events and services. Support our journalists today. Click here to sign up.
“After a recent review of your account, we have decided to end our relationship with you.”
Cryptoraves so far is a token meant to “boost credibility” on social media. A Twitter user can request free tokens and send them to other Twitter users. The tokens have no actual value, so, therefore, shouldn’t currently run afoul of securities regulations.
Cryptoraves’s Bryan Plasters writes in a blog post:
“We did send two wire transfers to Gemini to buy ETH and LOOM in order to cover future blockchain fees. We suspected that these transactions flagged our account, but the Chase rep would not confirm this. They would not give us a reason for the closure. We called the number in the letter and the agent told us to visit a branch for these details. Visiting our branch resulted in no other details except when our branch rep pressed the agent (yep as the primary course of action, our rep called the same phone number), they said we were operating in an ‘prohibited industry’. I guess JPM’s own blockchain department didn’t get the memo?”
JP Morgan Fires Loyal Customer
Sadly, the proprietors of Cryptoraves, LLC, had been happy with their long-standing relationship with JP Morgan Chase. They say they’ve been doing business for 15 years there, and that they’ve never had a problem as a result of crypto activities prior to this.
The interesting thing about JP Morgan’s shuttering of their account is the timing. The letter is dated just one day after JP Morgan launched JPM Coin. JPM Coin, of course, is a solution for international payments offered to major clients. It is used to subvert high international fees for a small percentage of JP Morgan’s daily $6 trillion in transfers.
This is, of course, not the first time Chase has closed accounts related to the crypto industry. Every now and then someone comes up for air and reports that the banksters have bullied them out of the regular banking world.
The trend is rather widespread. Bloomberg reported earlier this month that JP Morgan had blacklisted most crypto startups. Sam Bankman-Fried, an expert on the subject, told them:
“It’s not illegal for big banks to bank the crypto industry, but it’s a massive compliance headache that they don’t want to put the resources in to solve.”
Banking with crypto is a problem consistently faced by traders and holders. The simple act of sending a deposit to an exchange can result in account closure.