JPMorgan Chase has reportedly frozen bank accounts associated with two venture-backed stablecoin startups after identifying links to sanctioned and high-risk jurisdictions.
The accounts belonged to BlindPay and Kontigo, both backed by Y Combinator and focused on stablecoin services across Latin America.
The action followed JPMorgan’s identification of business activity connected to Venezuela and other locations subject to US sanctions.
Bank Responds to Stablecoin Concerns
A JPMorgan spokesperson said the decision was unrelated to opposition toward stablecoins as a technology.
“This has nothing to do with stablecoin companies,” the spokesperson said.
“We bank both stablecoin issuers and stablecoin-related businesses, and we recently took a stablecoin issuer public,” the spokesperson added.
Both BlindPay and Kontigo accessed JPMorgan’s banking infrastructure through Checkbook, a digital payments firm that partners with large financial institutions.
Chargebacks and Risk Flags
Checkbook chief executive PJ Gupta said the startups were among several firms affected by a surge in chargebacks.
According to Gupta, the increase stemmed from rapid customer onboarding.
“They opened the floodgates and a bunch of people came in over the internet,” he said.
The chargeback spike reportedly triggered heightened scrutiny and eventual account closures by JPMorgan.
Expanding Payments Partnership
The account freezes occurred as JPMorgan and Checkbook continued to expand their partnership.
In November 2024, Checkbook joined the J.P. Morgan Payments Partner Network, enabling corporate clients to send digital checks.
Earlier in the year, Checkbook also broadened its business-to-business payment services, targeting sectors including legal services, government, and banking.
Venezuela and Crypto Adoption
The situation highlights the complexities of operating crypto-related businesses in regions under sanctions.
Cryptocurrencies have become increasingly important in Venezuela as citizens seek alternatives to a collapsing national currency and tighter government controls.
This dynamic has placed financial institutions under pressure to balance compliance with growing demand for digital asset services.
Broader Industry Tensions
The freezes come amid wider criticism of JPMorgan’s relationship with crypto firms.
In July, Gemini co-founder Tyler Winklevoss accused the bank of retaliating against his company following public criticism of JPMorgan’s data access policies.
At the same time, JPMorgan has been exploring plans to offer crypto trading services, including spot and derivatives products, to institutional clients.
The contrasting moves underscore ongoing tension between regulatory compliance and the bank’s expanding interest in digital assets.
