Crypto Startup: JP Morgan Chase Closed our Account with No Explanation

Journalist:
P. H. Madore @bitillionaire
March 13, 2019

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:

“After a recent review of your account, we have decided to end our relationship with you.”

Chase failed to explain why it closed the crypto startup’s account. | Source: CryptoRaves/Medium

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

Jamie Dimon: Crypto for me, but not for thee. | Source: Shutterstock

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.

Last modified (UTC): October 9, 2019 17:06

P. H. Madore @bitillionaire

P. H. Madore has written for CCN since 2014. Please send breaking news tips or requests for investigation to bitillionaire+phm@gmail.com. He lives in Maine, USA. A single father of four young children, he does not discourage financial donations, provided they do not come with strings attached.