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Stablecoin Startups Spark Trouble for JPMorgan
Bank has frozen accounts for two startups doing business in Venezuela and other legally risky countries.
JPMorgan Chase in recent months has frozen accounts used by at least two fast-growing stablecoin startups, highlighting the risk that cryptocurrency transactions pose for banks, which are required to know the people they do business with and the source of their cash.
The stablecoin startups did business in Venezuela and other places that posed legal risks to the bank due to sanctions or other restrictions. One of the stablecoin startups has advertised that customers do not have to submit to identity checks before the transactions. Another startup abruptly culled all its customers from high-risk countries after JPMorgan froze its accounts, according to the startup’s communications with customers.