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Coinbase, JP Morgan relationship intact amid regulatory crackdown: Sources

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  • Coinbase will continue banking with JP Morgan amid increasing regulatory scrutiny, two people familiar with the matter told The Block.

Rising regulatory scrutiny isn't coming between Coinbase and one of its banking partners, JPMorgan Chase. 

The cryptocurrency exchange and the Wall Street stalwart are sticking together amid increasing scrutiny from Washington and elsewhere, two people familiar with the matter told The Block.

Coinbase pointed to its website listing its banking partners when asked to comment, while JP Morgan declined to comment.

The industry is on high alert as the Securities and Exchange Commission cracks down on a range of crypto companies, including a recent settlement with Kraken over allegations surrounding its staking program. Paxos yesterday was ordered by the New York Department of Financial Services to stop issuing BUSD.

Bloomberg earlier reported the regulatory actions could push banks to stop working with crypto firms, pushing them to the fringes of finance.

SEC Chair Gary Gensler didn't mince words after the Kraken enforcement.

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“This really should put everyone on notice in this marketplace whether you call it lend, whether you call it earn, whether you call it yield, whether you offer what’s called an annual percentage yield, APY,” Gensler said on CNBC Friday.

In early January, the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. put out a joint statement that reminded banks of their safety and soundness obligations and outlined risks they see in the cryptocurrency sector. Though the statement noted that banks aren't prohibited from doing business with companies that operate within the law, the regulators raised several red flags for those hoping to dive deeper into crypto-related activities.    

On Jan. 12, the agency charged both Gemini and Genesis with the unregistered offering and sale of securities through the Gemini Earn lending program.

JPMorgan is listed along with Signature Bank, Cross River Bank, Silvergate Bank and Pathward as depository institutions at which Coinbase may deposit customer funds.


© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Christiana is a long-time journalist who has written about markets in the Americas, politicians who stashed cash in their underwear and high-end heels, to name just a few. She previously spent six years at Bloomberg, and her work has appeared in the WSJ, LA Times, Insider, Vogue Business and more. Christiana has a bachelor's degree in English from Pace University and a master's degree in journalism from New York University. She completed a master's degree in media psychology for fun.
Frank Chaparro is Host of The Scoop podcast and Director of Special Projects. He also writes a biweekly newsletter. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. For inquiries or tips, email [email protected].

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