Cryptocurrency exchange Gemini has denied reports that J.P. Morgan Chase has ended their banking relationship.
“Despite reporting to the contrary, Gemini’s banking relationship remains intact with JPMorgan,” Gemini said Wednesday (March 8) in a post on Twitter.
Despite reporting to the contrary, Gemini’s banking relationship remains intact with JPMorgan.
— Gemini (@Gemini) March 8, 2023
Reuters reported Wednesday that J.P. Morgan Chase is cutting off its banking relationship with Gemini, citing an unnamed source who is “familiar with the situation.”
J.P. Morgan Chase did not immediately reply to PYMNTS’ request for comment.
The Reuters report said the move by J.P. Morgan Chase comes as crypto markets have been shaken by recent events that include Silvergate Capital, a lender in the digital asset industry, cautioning that it may not be able to continue as a going concern, analysts observing that there are fewer options for crypto firms to find banking partners in the United States, and regulators telling banks to be careful in their dealings with crypto clients.
Silvergate Capital said in a March 1 filing with the Securities and Exchange Commission (SEC) that it is delaying its annual report as it examines “certain regulatory and other inquiries and investigations that are pending with respect to the company.”
The filing references “investigations from our banking regulators, congressional inquiries and investigations from the U.S. Department of Justice.”
The outcome of these events could impact Silvergate’s ability to “continue as a going concern for the twelve months following the issuance of its financial statements,” the filing said.
By the following day, March 2, four crypto-related firms — including Gemini — said they are cutting ties with Silvergate Capital.
In addition to Gemini, these firms include cryptocurrency exchange Coinbase, peer-to-peer (P2P) payments technology firm and USDC stablecoin manager Circle and blockchain infrastructure platform Paxos.
Gemini said at the time in a post on Twitter: “We maintain relationships with several banking partners. We are sensitive to the concerns around Silvergate and are in the process of unwinding certain services with them and notifying customers.”
1/ We maintain relationships with several banking partners. We are sensitive to the concerns around Silvergate and are in the process of unwinding certain services with them and notifying customers. Otherwise, all Circle services, including USDC are operating as normal.
— Circle (@circle) March 2, 2023
Among those who have cautioned banks about their relationships with crypto companies is Federal Reserve Board Governor Christopher Waller, who said Feb. 10 that banks must approach crypto customers in the same “safe and sound” manner they generally employ.
“As with any customer in any industry, a bank engaging with crypto customers would have to be very clear about the customers’ business models, risk management systems and corporate governance structures to ensure that the bank is not left holding the bag if there is a crypto meltdown,” Waller said at the time.
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