- JPMorgan Chase froze accounts linked to two venture-backed stablecoin startups after identifying ties to sanctioned and high-risk jurisdictions.
- The affected startups, BlindPay and Kontigo, used banking services through Checkbook, a digital payments partner.
- JPMorgan cited business activity related to Venezuela and a surge in chargebacks tied to rapid customer onboarding as reasons for the freezes.
- JPMorgan Chase and Checkbook are expanding their partnership, even as the bank explores broader crypto services.
JPMorgan Chase recently froze bank accounts tied to two venture-backed stablecoin startups after flagging exposure to sanctioned and high-risk jurisdictions. The accounts belonged to BlindPay and Kontigo, which primarily operate across Latin America, according to a report by The Information.
Both startups accessed JPMorgan Chase services through Checkbook, a digital payments firm that partners with large banks. The bank said it identified business activity tied to Venezuela and other locations subject to U.S. sanctions and moved to freeze the accounts.
A JPMorgan Chase spokesperson said “This has nothing to do with stablecoin companies,” and added “We bank both stablecoin issuers and stablecoin-related businesses, and we recently took a stablecoin issuer public.” A surge in customer chargebacks also contributed to account closures, the report said. Chargeback: a payment reversal initiated by a cardholder’s bank when a transaction is disputed.
Checkbook’s CEO, PJ Gupta, said rapid online onboarding produced a spike in chargebacks and identified BlindPay and Kontigo among affected firms. “They opened the floodgates and a bunch of people came in over the internet,” he told the same report.
The freezes come as JPMorgan Chase and Checkbook deepen ties; the firms announced in November 2024 that Checkbook would join the J.P. Morgan Payments Partner Network to enable corporate clients to send digital checks (announced). Stablecoin: a digital asset designed to maintain a stable value relative to a fiat currency.
Separately, in July, Tyler Winklevoss said JPMorgan Chase paused a re-onboarding process for Gemini after his public criticism. JPMorgan Chase is also weighing plans to offer crypto trading, including spot and derivatives products, to institutional clients.
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