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The cryptocurrency revolution is here, and traditional banks are terrified.
JP Morgan is the perfect example. First, the bank’s boss Jamie Dimon labelled bitcoin a “fraud” and promised to fire any employees caught trading crypto. Now, the bank is blacklisting cryptocurrency startups and refusing to open checking accounts.
Per a Bloomberg report, JP Morgan still refuses to bank cryptocurrency businesses. The Wall Street giant even shut down the account of Kraken – one of the world’s largest and most-secure cryptocurrency exchanges.
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
All the while, JP Morgan was quietly working on its own cryptocurrency, JPMCoin. It’s a clear sign that Wall Street is threatened by cryptocurrencies. Banks are doing everything in their power to slow down the growth of crypto, while quietly stealing its revolutionary technology.
Banks are Terrified (and Clueless) About Bitcoin
Wall Street continues to blame “money-laundering” on its refusal to bank crypto businesses.
This is rich considering Wall Street launders more drug money than bitcoin. JP Morgan was fined $1.6 million for its failure to stamp out money laundering. And Deutsche Bank was recently complicit in $10 billion worth of money-laundering.
“Bitcoin is only used for money laundering”
Deutsche Bank: “hold my beer”— Crypto Bobby (@crypto_bobby) January 23, 2019
Instead of blaming money-laundering, Wall Street’s blanket ban on crypto banking shows both laziness and fear. Banks refuse to navigate the regulations and conduct due diligence. And they’re genuinely threatened by the future of cryptocurrencies.
“It’s not illegal for big banks to bank the crypto industry, but it’s a massive compliance headache that they don’t want to put the resources in to solve.’’ – Sam Bankman-Fried, CEO of Alameda Research.
BitPay, Kraken Among the Blocked Businesses
To be clear, we’re not talking about small-scale crypto startups. Bloomberg’s report reveals some of the biggest and most-established blockchain companies have been blacklisted, including BitPay and Kraken.
BitPay has attracted more than $70 million investment and processes more than $3 billion in transactions every month. Kraken is one of the largest crypto exchanges on the planet.
I cycled through multiple rented PayPal accounts and I started spreading deposits across several banks, cash in safety deposit boxes. Probably a compliance person's worst nightmare but I basically had to employ the arts of a money launderer to survive.
— Jesse Powell (@jespow) January 9, 2019
We’re talking about large-scale, legitimate blockchain companies being cut off by traditional finance.
It’s not just crypto companies either. Last year, UK mortgage lenders refused to accept cryptocurrency profits as down-payments on real estate.
“The first mortgage lender I rang asked me what a cryptocurrency was,” Mark Stallard told the Financial Times. “I rang two other lenders and they said they would not touch it.”
Mortgage brokers responded to the FT claiming that money-laundering fears were behind the refusals.
New York Bank Steps in to Support Crypto Startups
There are some banks willing to go the distance for blockchain startups. New York-based Signature Bank announced last week it will open up banking services to Bermuda crypto startups.
#BREAKING: #SignatureBank will bank Bermuda’s #FinTech firms. The NY based commercial lender will provide a full range of banking services to companies that meet its + Bermuda’s standards. #Bermuda – licensed firms can apply immediately. #ICO #Crypto #cryptocurrencies
— Toni Waterman (@ToniWaterman_) February 28, 2019
The bank has embraced crypto in other ways, too. It launched an Ethereum-based stable coin called Signet. The little-known banking coin appeared before JP Morgan’s much-hyped JPMCoin.
The bank will now provide checking accounts and corporate debit cards for crypto clients in Bermuda.
Cryptocurrencies Are a Huge Threat to Banks
The money-laundering excuse is quickly growing old. It hides the true fact: banks are threatened by cryptocurrencies.
Bitcoin and crypto offer an alternative system that doesn’t rely on a third-party institution. They can’t be confiscated or manipulated by central banks and governments.
On a practical level, cryptocurrency transactions are faster and more secure than traditional systems. Trust in banks is declining and faith in bitcoin is growing. The revolution is here, and Wall Street is terrified.