The head of one of the largest cryptocurrency exchanges in the world has urged UK customers of JPMorgan Chase to close their accounts in protest at the retail bank’s upcoming ban on crypto transactions.
Chase announced this week it would be banning account activity involving cryptocurrency from October 16, citing a rise in scams and fraud.
It is the latest in a recent slew of financial institutions to turn its back on digital assets.
“We’ve seen an increase in the number of crypto scams targeting UK consumers, so we have taken the decision to prevent the purchase of crypto assets on a Chase debit card or by transferring money to a crypto site from a Chase account,” the bank stated.
However, the bank’s actions have riled many big names in the crypto industry – particularly Coinbase co-founder Brian Armstrong, who demonstrated his disbelief at the move.
“Totally inappropriate behaviour from Chase (this is their UK bank only, is my understanding),” he responded before tagging in the Prime Minister and one of the leading crypto-friendly MPs.
“Rishi Sunak, Andrew Griffith, it appears Chase do not respect your policy goals – thoughts?
“UK crypto holders should close their Chase accounts if this is how they’re going to be treated. Really hoping there is more to this story than meets the eye, and that this does not reflect Chase UK’s actual view.”
JPMorgan opened the mobile app-based Chase in 2021 and has since attracted more than 1.6 million customers. The UK venture is regarded as the testbed ahead of a future international launch.
The announcement has also triggered debate among the crypto legal community, with William Garner, Partner at law firm Charles Russell Speechlys, stating it would be interesting to see if it becomes a publicly disclosed formal policy.
“From our direct experience we know that crypto related businesses (whether regulated or unregulated) have found it virtually impossible to get traditional corporate bank accounts for the last few years in any event,” he said.
“Many have had to use either overseas banks or online alternatives (such as payment firms). However, to date, we do not believe that banks have had quite such a formal and public policy. If UK banks start to adopt formal policies, but banks in other jurisdictions don’t, that will be interesting from an international perspective.”
He continued: “This development is interesting when we look at the at it in the context of the recent ‘de- banking’ debacle, where regulators are considering banks’ ability to discriminate particularly where there is no actual risk to the bank. I think the difference here is that there remains a very clear risk to the banks when they are facilitating payments for or to or from crypto related businesses.
“Although most UK businesses providing services for unregulated crypto now have to register with the FCA for money laundering purposes, the risk to the bank must clearly be higher with ‘traditional types’ of unregulated crypto assets (like Bitcoin), rather than some of the newer types of crypto or digital asset which are regulated (as securities).
“CFD brokers have had similar problems in getting banks to service them in the last few years on their perceived ground of risk profile (even where they do not offer CFDs with a crypto underlying). However, the situation seems to be improving. Given that the CFD brokers are all regulated and carry out services in relation to regulated investments, I think there is less scope for banks to simply refused to deal with such firms because of the nature of their business.”