That is precisely what has just happened to Uniswap founder Hayden Adams according to a Jan. 23 tweet. Adams revealed that JPMorgan Chase had closed his bank accounts with “no notice or explanation.”
He added that he knew of “many individuals and companies who have been similarly targeted simply for working in the crypto industry” before exclaiming, “thanks for making it a personal.”
🧑💻 I know many individuals and companies who have been similarly targeted simply for working in the crypto industry
🚀 Thanks for making it a personal
— hayden.eth 🦄 (@haydenzadams) January 23, 2022
Shadow De-banking of Crypto
This would be the perfect way for banks to crack down on crypto without all the public fanfare. This was suggested by former Commodity Futures Trading Commission (CFTC) Commissioner Brian Quintenz, who responded to Hayden’s quest for clarity from the bank.
“Likely a shadow de-banking of crypto by @federalreserve or @USOCC [Office of the Comptroller of the Currency] bank examiners, with direction from the top.”
Quintenz added that “if the examiner told a bank that a certain customer is too risky and the bank ended that relationship, the bank is contractually prevented from telling that customer why.”
He cited a Nov. 20 Wall Street Journal article by pro-crypto senator Cynthia Lummis to hammer home the point. In it, Lummis claimed that the new chiefs at the Federal Reserve were purposely holding back fintech and crypto innovation, especially in her represented state of Wyoming, where special-purpose depository institutions (SPDIs) have previously been granted a green light to operate as fully regulated crypto banks.
There were several replies to Hayden’s complaint, many of which stated that they have also been blocked by banks or had accounts closed for dealings with crypto.
Chase support did actually respond to the tweet also, asking the Uniswap founder to use their support messaging system to clear up the “less than ideal experience” he has had with the bank.
Democratic Candidate for Congress, Matt West, commented:
“Absolutely insane. This is part of why we need clear regulatory framework in the US re: crypto and banks.”
CEO of JPMorgan’s digital asset unit said crypto is “here to stay” last week, but maybe not for some of its customers, it seems.
It is not just U.S. banks that are coming down on crypto investors. Last year, CryptoPotato reported that an Australian investor sued Westpac and the ANZ bank for closing his accounts resulting in the loss of funds at the time.
Banks now have the perfect weapon against crypto, as this shadowy action can be used to discreetly expel customers without the bank having to justify those actions.