Major cryptocurrency companies and projects are being denied by conventional financial institutions from all over the world, including even the Wall Street giants. Such fear and hostility is caused by multiple reasons, which we will discuss down below.
The hypocrisy of JP Morgan
JP Morgan Chase is an American financial holding, which was established after the emergence of a couple of major banks into one entity. It is headquartered in New York, on Wall Street, and is a part of America’s “Big Four” – four largest banks.
As reported by Bloomberg, the company adopted an attitude of total non-acceptance towards cryptocurrencies. JP Morgan denies banking services for all types of crypto businesses and shuts down the accounts of major crypto platforms.
For instance, the bank has recently closed the account of Kraken – the largest cryptocurrency exchange in the world in terms of trading volume. Its CEO, Jesse Powell, commented on the situation on Twitter:
Paypal locked up all the money I had for 6 months, almost lost my business/apartment. BofA killed @Krakenfx's payroll account on 30 days notice. Chase killed it on 5 days notice, by mail, which arrived after the account was closed. Found out when employee checks bounced.
— Jesse Powell (@jespow) January 9, 2019
With all that being said, JP Morgan does have its own cryptocurrency – JPM coin, which was developed quite secretly. Although the bank representatives claim that the purpose of this coin is just to speed up transaction, the fact remains: it is still a cryptocurrency.
Thus, we can see that JP Morgan bashes crypto in public, but uses it in private because of its potential – this is pure hypocrisy
Why are banks scared of crypto?
As we have already mentioned, there a couple of reasons for the banks to fear and dislike cryptocurrencies.
First and foremost, many financial experts believe that the reason for most banks to deny crypto is to fight money laundering.
“Anti-money laundering rules typically require banks to know the identity and aims of their clients and often be able to trace the source of their customers’ cash. Building a compliance and monitoring system is expensive and some banks conclude the costs just aren’t worth it,” is mentioned in the Bloomberg report.
However, this is quite irrational, given the fact that these very banks actually launder way more money than Bitcoin does.
Frankly speaking, many specialists are sure that traditional banks just do not have enough diligence and flexibility in thinking to implement cryptocurrencies. Moreover, they fear that in the future the digital world might replace them completely.
Subscribe to The Coin Shark news in Facebook: https://www.facebook.com/coinshark/