Gemini issues statement that JPMorgan to cut ties with crypto exchange
- Gemini claimed that all is well between the crypto exchange and the banking giant
- The report comes days after US federal regulators issued a warning to the banks
Gemini – a leading US-based crypto exchange – broke the silence on the ongoing reports of the leading US banking institution – JPMorgan cutting ties with the crypto exchange. The crypto exchange claimed there was no change in the relationship status of the multinational bank. Meanwhile, JPMorgan did not issue a statement on the report by press time.
The company’s statement on Twitter read,
“Despite reporting to the contrary, Gemini’s banking relationship with JPMorgan remains intact.”
The crypto exchange first entered into an alliance with JPMorgan in May 2020 along with another popular American crypto exchange – Coinbase. And it was the first time America’s largest bank extended banking services to crypto firms. According to a Wall Street Journal report, JPMorgan had agreed to provide cash management services and manage dollar-denominated transactions. This service was extended to US-based customers only.
Gemini distances from Silvergate Bank
Notably, the report came just as Silvergate Bank – a crypto-focused financial services provider – is showing signs of distress. This resulted in several crypto firms, including Gemini, distancing themselves from the bank. The crypto exchange had stated that it has stopped accepting deposits and processing withdrawals via Silvergate.
The crypto-centric bank has been facing a bank run since the collapse of the once popular crypto exchange – FTX. And matters turned serious for Silvergate after it announced it would delay the release of its annual report in an SEC filing. In addition, the filing raised doubts about survival as a going concern, which resulted in the share price taking a dive in the market.
Additionally, given the recent collapses and bank run, US federal regulators issued a warning to banks about crypto-related liquidity issues. And the panel consisted of the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency.
These regulators stated that funding from crypto-related firms “may pose increased liquidity risk to banking organizations.” The authorities cited the unpredictability of the inflow and outflow of scale deposits as the cause of the risk. This is mainly because the crypto market is affected by market events and uncertainty, market volatility and other factors.
