It may have seemed that with the announcement of the JPM Coin, the banking giant had overcome its ‘cryptophobia’. However, I cam across a story last week that indicates it is still some way from showing crypto the love.
Cryptoraves, a company that is working on the tokenization of social media, had its bank account shut down last month by JP Morgan, without any explanation whatsoever.
In the long run, JP Morgan told them they were working in a “prohibited industry.” But that is as much information as Cryptoraves could wring out the stone that is the bank.
Cryptoraves was surprised to receive a letter saying, “After a recent review of your account, we have decided to end our relationship with you.” That is like ending a relationship by text. It is rather harsh, all the more because it doesn’t provide any reason for the break-up. Who wants a bank that treats its customers like this?
And is Cryptoraves really operating in a “prohibited industry”? Go to its website and the first thing you see is that you can get “FREE TOKENS.” People use the tokens to boost their credibility on social media. For example, a Twitter user can request free tokens and send them to other Twitter users. The tokens have no actual value, therefore they are not securities in the regulatory sense.
Cryptoraves has published an assessment of where it thinks the issue with JP Morgan arose: “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?”
Furthermore, Cryptoraves had had a 15-year relationship with the bank and praised its service. There is a suggestion that the timing of the account closure is connected to the launch of the JPM Coin, but that may just be a bit of a conspiracy theory. What is clear though is that banks are still making it difficult for crypto-related companies and crypto owners, especially when something as innocuous as a transfer can result in your account being closed.