As of Wednesday, the 8th of March 2023, the US banking giant, J.P. Morgan Chase is reportedly severing ties with Gemini, the cryptocurrency exchange founded by Cameron and Tyler Winklevoss.
However, the cryptocurrency exchange Gemini has in a way denied this report. In a Twitter post, Gemini claims that its relationship with JP Morgan remains intact.
The decision was made a few days after Silvergate Capital Corp, one of the major lenders in the cryptocurrency industry, announced that it would be shutting down its operations, citing the reason to be the crash in the cryptocurrency markets.
Before the announcement of its voluntary liquidation, Silvergate Capital on the 1st of March revealed in a filing with the Securities and Exchange Commission (SEC) that it is withholding the release of its annual report while it reviews “various regulatory and other inquiries and investigations that are pending about the company”. The filing also made mention of investigations from banking regulators, investigators, and congressional inquiries from the Department of Justice, US. It was in this same filing Silvergate Capital expressed its worry about its ability to continue its operations.
In response to the filing, four cryptocurrency firms — Coinbase, Circle, Paxos, and Gemini severed their ties with Silvergate Capital.
The US banking sectors and Crypto
The United States of America has seen a continued breakdown in the relationships between traditional banking services and crypto industries. Just recently, Binance had to suspend USD bank transfers after Signature Bank, its SWIFT transfer partner significantly reduced deposits from crypto clients, limiting Binance users’ trade to $100,000 in their USD bank accounts.
This is a result of the advice that regulators have given Banks, warning them to beware of any liquidity problems that might result from their interactions with crypto clients.
Experts have cautioned that there may be limited options available for cryptocurrency companies searching for banking partners in the United States.
Together, the Federal Reserve, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency advised banks to put strong tools in place to monitor funds placed by businesses connected to digital assets.
This new development can be said to have little or no impact on Gemini as its relationship with other banks including State Street remains intact.
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