Tyler Winklevoss, co-founder of the popular crypto platform Gemini, accused JPMorgan of pausing the re-onboarding of crypto exchange Gemini. Winklevoss publicly called out the bank on X after he criticized the bank’s new policy to charge fintech firms for access to customer data. He tagged JPMorgan’s CEO Jamie Dimon for his anti-competitive behavior.
The Gemini head said such a move could bankrupt fintechs like Gemini, Coinbase, and other crypto platforms. He framed Dimon’s decision as a retaliation for speaking out in continuation of what he labelled “Operation Chokepoint 2.0,” a campaign launched during the Biden administration to exclude crypto firms from banking infrastructure. The feud between Winklevoss and Jamie Dimon is escalating to a whole new level, and the impact on the crypto ecosystem could be graver than imagined.
What Stirred Up the War
Tyler Winklevoss, in his X post, accused large banks of fighting against the US Consumer Financial Protection Bureau’s (CFPB) open-banking rule. The CFPB, under Section 1033 of the Consumer Financial Protection Act, guarantees third parties access to consumers’ account data through aggregators like Plaid. This is a conduit that many U.S. users use to connect their checking accounts with crypto platforms, such as Gemini.
In Winklevoss’s defense, he said large banks like JPMorgan want to charge Fintech platforms exorbitant fees to access customers’ banking data, a change that would stifle retail on-ramps for customers who want to fund crypto purchases with the USD. Winklevoss claims that JPMorgan froze Gemini’s re-onboarding process because of his earlier tweet.
The Gemini boss said this isn’t the first time JPMorgan dropped the platform. A few years ago, he said Gemini was previously offboarded during Operation ChokePoint 2.0, and JPMorgan had earlier deemed the relationship unprofitable. The bank would later sever banking ties with the platform, a move he claims has been repeated following his criticism, reinforcing concerns about the hostility crypto exchanges face from traditional banks.
Experts Connect the Entrenched Hostility Towards Crypto Platforms to Operation Chokepoint 2.0
Several crypto exchanges, including Gemini, lost their long-standing accounts with traditional banks between 2023 and 2024 amid heightened scrutiny. Some crypto experts, such as Nic Carter, said this situation was caused by the stringent Operation Chokepoint 2.0, which was launched under former President Joe Biden.
Carter linked the actions carried out by banking authorities to this operation, which specifically targeted the crypto industry. Federal Deposit Insurance Corporation Acting Chairman Travis Hill confirms that this action was a targeted effort towards debunking crypto firms. This forced several exchanges to court new partners to continue their offerings in the United States.
Implications of JPMorgan’s Decision on the Crypto Ecosystem
Access to traditional banking services remains pivotal for crypto exchanges. However, JPMorgan’s move represents a threat to open banking, which goes against the US Consumer Financial Protection Bureau’s (CFPB) open-banking rule under Section 1033. Not only is this move a threat, but it will kill open banking through high Fintech pricing.
Additionally, such tactics will strain the relationship already established between banks and crypto. It will also erode trust between startups and users, with the latter opting to leave the United States for greener pastures. The implication of this move is stifled innovation, placing the United States at the mercy of other progressive countries.
For Gemini, the dispute with JPMorgan may impact investor confidence as it plans its IPO. This may not project a good image for the crypto firm.
Will Donald Trump Step In?
Given his pro-crypto policies, our experts believe Donald Trump will intervene to de-escalate the issue. JPMorgan and other banks may extend this behavior to other exchanges, such as Kraken and Coinbase. Trump wants to avoid that, as he seeks to fulfill his crypto campaign promises.
Analysts believe he may entice Congress to establish clearer open banking protections, which will allow fintech platforms to regain access to customers’ data without any fee policy. This will benefit both banks and crypto firms, as cryptocurrency is becoming more institutionalized. The United States’ legal framework must ensure this doesn’t escalate further than it already has.
As for Gemini, it may look for a new banking partner pending the case with JPMorgan is resolved. This is essential as it gears towards a public offering, as part of its expansion plans. The firm has already launched a tokenized stock offering and rolled out USD support for EU customers.
