JPMorgan Chase has allegedly been targeting people and companies working in the crypto industry by shutting their bank accounts. The latest case involves Hayden Adams, founder of the Uniswap Protocol – the largest decentralized exchange protocol, whose accounts have just been closed by the bank.
On Sunday, Adams revealed on Twitter that the American banking giant had closed his bank accounts with no prior notice or proper explanation.
Although it is outrageous for a bank to close an account simply because a person or a company is working in the crypto industry, several people have alleged that such a move is a muddy game and soft display of power by the institution – that banks sometimes portray it as an “unfriendly” approach towards such competition. And banks can sometimes append a claim of “suspicious transactions” either to wrongfully target an account or out of lack of information about an account or lack of knowledge about the overall bank’s strategy on the matter by the local staff.
Additionally, many legacy banks are still conservative and will most likely raise an eyebrow about a transaction whose source is cryptocurrency when vast amounts are traded – banks will usually check the sources for huge transactions regardless of the industry a company or a person is involved in.
While there is no particular requirement for banks to close any account based on an industry one works in, all banks are required, as per AML laws and regulations, to ascertain sources of funds. For that reason, they likely will flag, suspend, or close accounts based on an estimation that they are risky or are doing suspicious trades.
Hayden Adams’ claim is among many launched by other customers about the bank closing accounts related to crypto dealings after flagging them for “suspicious activities”. A quick check reveals that JPMorgan and most leading financial institutions are known to freeze and close down accounts involving transactions to or from crypto firms even with no wrongdoing on the account. The owners are then required to withdraw their funds from the account within a stipulated period and those transactions have to be done at a local branch. For any person or a company whose clients are linked through an on-ramp, this can be very frustrating.
Nevertheless, as ZyCrypto reported, JPMorgan does already allow clients to invest in crypto funds through their accounts, including GrayScale, Osprey Funds, and NYDIG.