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Crypto Companies Are Asking Jamie Dimon to Hold Their Money


Sir, please take accept our funds.
Photo: Marco Bello/Bloomberg via Getty Images

Some crypto companies seeking new bank accounts following the recent failures of Silvergate, Silicon Valley Bank, and Signature Bank have found a surprisingly warm welcome in an unlikely place: JPMorgan Chase and certain other “too big to fail” banks.

JPMorgan is opening up new bank accounts for crypto firms, such as VC funds and web3-infrastructure start-ups, which are moving their deposits to the bank, according to people familiar with the matter. The bank, headed by crypto skeptic Jamie Dimon, is not soliciting the business of crypto clients whose deposits have been stranded at the closed banks, one of the people said, but it is also not automatically turning them away.

“Systemically important banks are picking up more crypto business as they see the growth trajectory of the industry,” says Chris Burniske, a partner at Placeholder, a venture-capital firm specializing in blockchain tech. “The failure of their smaller peers represents a moment of opportunity for them to grow their own business lines.”

A representative at another large crypto venture-capital fund says, “We did call down to a lot of banks that are big-name brands from that ‘too big to fail’ category. I can’t say anyone said no to us.”

The willingness of the big commercial banks to accept money from crypto firms represents a departure from the generally crypto-phobic attitude on Wall Street in recent months — particularly after the collapse of FTX led many institutions to distance themselves from digital currency. In January, a trio of U.S. banking regulators issued a warning to the financial industry about the risks of dealing with cryptocurrencies, leading banks to minimize their relationships with digital-currency companies.

But the collapse of Silvergate, SVB, and Signature Bank — which were among the top crypto-friendly banks in the U.S. — has left the cryptocurrency industry scrambling to find banking services. Some crypto start-ups and other web3 companies turned to a handful of remaining smaller banks known to be crypto-friendly — including New Jersey–based Cross River Bank and upstart Mercury out of San Francisco. And in recent days, some firms — particularly well-funded crypto start-ups and investors — found the big banks more receptive than they had been in the past.

“They are all being more open to banking us,” says Yossi Hasson, co-founder and CEO of Metaversal, a company that invests in NFTs and raised $50 million last year, though he declined to specify where he had applied for new accounts. “Before, you just wouldn’t get through compliance,” he adds. “And now, magically, you might.”

The crypto companies that have been able to move money to top-tier banks in the U.S. — which include JPMorgan Chase, Citi, Bank of America, and Wells Fargo — in recent days were not willing to publicly name the institutions where they opened accounts for fear of jeopardizing the already fragile relationships. But crypto executives said JPMorgan and Citi have been the most welcoming to crypto companies. Goldman Sachs, which banks a select number of crypto companies including Gemini, declined to comment — as did Citi and Wells Fargo. Bank of America did not respond to a request for comment.

Still, leaders at cryptocurrency firms and banks alike cautioned that there are many other crypto start-ups with money marooned at Silvergate, Signature, and SVB struggling to find a new bank. “Even if they’re calling like crazy, the vast majority of deposits we’re rejecting because they just don’t meet our standards. Unless they’re that blue-chip fintech,” says a spokesperson at Cross River Bank.

The sudden loss of crypto’s go-to banks has led companies like Kraken, a leading U.S.-based bitcoin exchange, as well as a handful of Republican senators to accuse the U.S. government of running “Operation Choke Point 2.0.” The term, coined by crypto venture capitalist Nic Carter, refers to an alleged coordinated effort by regulators to crack down on the crypto industry by taking out its banking infrastructure. That has made surviving banks — and their new crypto customers — reticent to talk about their business relationships lest they become a target too. “They’re all getting banked, but no one wants to advertise that because of Operation Choke Point part two,” says the person at the crypto VC firm, referring to its portfolio companies. “We’re telling them to check a diverse set of boxes: They should have a regional partner, they should have a normie bank like Citi or Bank of America, and they should try if they can to have a prestigious brand like JPMorgan or Goldman.”

JPMorgan’s new work with crypto-related companies is especially notable, as Dimon has frequently (and famously) called bitcoin a “fraud” — including as recently as January, when he referred to it as “a pet rock.” In 2020, JPMorgan began banking two leading bitcoin exchanges, Coinbase and Gemini, in its first foray with crypto clients, The Wall Street Journal reported at the time. But just last week, JPMorgan cut ties with Gemini, according to Reuters, though Gemini, which is headed by Cameron and Tyler Winklevoss, denied the report.

A person close to the bank says that JPMorgan is still being very choosy in terms of its clients, and businesses that issue digital tokens are typically taboo. But other companies in the crypto world could still be accepted. “It really comes down to: ‘Are you primarily a crypto company? Is that your primary business? Are you exposing us to more volatility in some way?’” the person says.

“Among tier-one banks, no one’s friendly to crypto right now. That’s a reality,” says a person at a major U.S.-based crypto firm with multiple banking partners, noting that the banks have various restrictions that can change on a daily basis. “The thing is, banks will not refuse a ton of money if they get a ton of money. But they’re also assessing how risky your business is.”

The big banks’ historical rejection of crypto companies’ deposits has long been a problem for start-ups, which still need traditional bank accounts to operate their businesses and do things like lease office space and pay employees. “Crypto companies have struggled with access to banking since the earliest days of the industry,” says Meltem Demirors, chief strategy officer of CoinShares, a digital-asset investment company. Cryptocurrency firms have become accustomed to their banks abruptly changing their minds about them depending on bitcoin’s public perception: Even Silicon Valley Bank dropped Coinbase and other crypto companies as clients around 2015, though it still worked with some firms in the industry when it shuttered last week.

The closure of Signature Bank, in particular, came as a surprise — including to board member and former congressman Barney Frank, who told me that he believes the government took over the bank because “they don’t want banks doing crypto.”

For the crypto industry, the banking shake-up is another existential hurdle in a string of recent setbacks — including a bear market and FTX-driven contagion. “We did have this same situation back in the early days of crypto, when whether you could get a banking relationship determined whether you lived or died,” Carter says. “And we’re going back to that now.”





Read More: Crypto Companies Are Asking Jamie Dimon to Hold Their Money

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