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JPMorgan's Decision to Shut Down Crypto Accounts Sparks Concerns Over Debanking and Raises Regulatory Friction

JPMorgan's Decision to Shut Down Crypto Accounts Sparks Concerns Over Debanking and Raises Regulatory Friction

Bitget-RWA2025/11/24 20:36
By:Bitget-RWA

- JPMorgan's closure of Jack Mallers' accounts reignites debates over crypto "debanking" and regulatory pressures, with critics accusing the bank of perpetuating alleged Biden-era practices. - Mallers revealed unexplained account termination in September, citing "concerning activity" under the Bank Secrecy Act, while Trump's August executive order banning crypto debanking faces compliance questions. - Industry leaders and lawmakers condemn the move, arguing it undermines trust in traditional banks and risk

The sudden shutdown of Strike CEO Jack Mallers' accounts by JPMorgan Chase has reignited controversy over crypto "debanking" and regulatory scrutiny,

of continuing what they describe as "Operation Chokepoint 2.0," a policy linked to the Biden administration. Mallers disclosed on social media that closed his personal accounts in September, offering no detailed reason and only referencing "concerning activity" under the Bank Secrecy Act, . This action has been likened to a broader regulatory push to discourage banks from working with crypto companies, .

Mallers, whose father had been a private client of JPMorgan for three decades, criticized the bank for its opacity, sharing a notice that warned he could be prevented from opening new accounts in the future

. The episode has intensified doubts about the effectiveness of President Donald Trump’s August executive order, which prohibits banks from denying services to crypto businesses. Although the order threatens penalties for noncompliance, . Trump has previously condemned banks for closing accounts based on political motives, and as a reason for the family's interest in cryptocurrency.

The account closures have drawn sharp criticism from both industry leaders and politicians.

of damaging public confidence in the banking sector and contributing to the migration of crypto activity abroad. Tether CEO Paolo Ardoino called the move predictable, stating, "Bitcoin will endure through time. Any institution that tries to suppress it will ultimately fail and fade away," while Jason Allegrante of Fireblocks warned that limiting access to crypto could drive innovation overseas . Critics argue that such opaque decisions by banks undermine trust in the financial system and give excessive authority to regulators .

This dispute comes amid broader strains in the crypto industry.

warning that firms with significant digital asset holdings—such as MicroStrategy—could be forced to liquidate if MSCI Inc. removes them from its indexes in 2026. This has brought renewed attention to JPMorgan’s complex position as both a critic of crypto and a major player in financial markets. At the same time, , with figures like real estate investor Grant Cardone urging customers to withdraw their funds in protest.

JPMorgan has not publicly explained its reasoning for the account closures, citing regulatory requirements and confidentiality. Nevertheless, the bank has also moved forward with crypto-friendly projects, such as

and a collaboration with Coinbase to enable direct transfers from bank accounts to crypto wallets. This dual approach highlights the ongoing tension between established banks and the digital asset sector, as financial institutions balance compliance with growing demand for crypto services.

As the controversy grows, Mallers’ experience highlights the precariousness of banking for crypto leaders. With the Trump administration aiming to make the U.S. a center for digital assets and regulators updating risk guidelines for banks, this situation

about the future of banking access for crypto businesses. Whether this incident signals a major setback for crypto’s integration with traditional finance, or is just a temporary obstacle, remains to be seen.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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