JPMorgan Chase has reportedly frozen bank accounts tied to two venture-backed stablecoin startups after detecting potential exposure to sanctioned and high-risk jurisdictions.
The affected accounts belonged to BlindPay and Kontigo, two Y Combinator–backed stablecoin firms operating mainly in Latin America, according to a report by The Information. Both startups accessed JPMorgan’s banking infrastructure through Checkbook, a digital payments provider that partners with major financial institutions.
The report said the account freezes followed JPMorgan flagging business activity connected to Venezuela and other regions subject to US sanctions.
A JPMorgan spokesperson emphasized that the action was not aimed at stablecoins themselves. “This has nothing to do with stablecoin companies,” the spokesperson told The Information, adding that the bank continues to serve stablecoin issuers and related businesses and has recently taken a stablecoin issuer public.
Chargeback surge cited as trigger
Checkbook CEO PJ Gupta told The Information that BlindPay and Kontigo were among several companies affected by a spike in chargebacks, which ultimately led the bank to close accounts. Gupta attributed the increase to rapid customer onboarding. “They opened the floodgates and a bunch of people came in over the internet,” he said.
The freezes come as JPMorgan and Checkbook expand their partnership. In November 2024, Checkbook joined the J.P. Morgan Payments Partner Network, allowing corporate clients to send digital checks. Earlier in 2024, Checkbook also broadened its B2B payments offering, targeting sectors such as legal services, government and banking.
As Cointelegraph has reported, crypto adoption has become increasingly central in Venezuela, where citizens have turned to digital assets to hedge against currency collapse and stricter government controls.
Winklevoss alleges retaliation
In a separate incident, Gemini co-founder Tyler Winklevoss claimed in July that JPMorgan paused the crypto exchange’s re-onboarding process in response to his public criticism of the bank’s new data-access policy. Winklevoss accused JPMorgan of anti-competitive behavior that could harm fintech and crypto firms.
At the same time, JPMorgan has been exploring plans to offer crypto trading services — including spot and derivatives products — to institutional clients, as demand grows alongside a more supportive US regulatory environment.
