When a Wall Street banking giant and a crypto CEO start a public battle over debanking, the world takes notice and the back-and-forth gets messy.
Jack Mallers, CEO of crypto payments company Strike, dropped a bombshell on social media on November 23, claiming that JPMorgan had closed all of his accounts without cause.
“Last month (September 2), JP Morgan Chase kicked me out of the bank,” Mallers said in an article on X. “It was weird […] Every time I asked them why, they said the same thing: ‘We’re not allowed to tell you.’
The post went viral and sparked reactions from notable people, including Paolo Ardoino, CEO of Tether, who said, “I think it’s for the best,” and Grant Cardone, a multi-billionaire real estate mogul and stock fund manager, who in an X-rated post called for a boycott and announced he had moved all his assets out of JPMorgan.
Bo Hines, former digital assets advisor to President Donald Trump and now strategic advisor to Tether, reminded the bank on After the crypto-friendly president took office, regulators rolled back many Biden-era directives against crypto entities.
“Operation Chokepoint 2.0 unfortunately continues,” said Senator Cynthia Lummis. “Policies like JP Morgan’s undermine trust in traditional banks and send the digital assets sector overseas.”
While the takedown of a company by a banking giant is not unusual and often goes unreported, this one struck a chord within the crypto community, given Mallers and Strike’s position in the industry and previous crackdowns by the US government.
“Even though big banks frequently freeze their accounts, it’s hard to ignore Mallers’ timing of removing his accounts from JPMorgan,” said Timothy O’Regan, an emerging markets fund expert and founder of IronWeave.
The debanking letter
Mallers sat on JPMorgan Chase’s (JPMC) debanking letter for two months before blowing the whistle. In it, the bank informed the founder of Strike, a Bitcoin payments app with around 800,000 monthly active users, that it had closed his accounts due to concerning activity.
“We have decided to close your accounts,” Chase’s letter to Mallers read, leading many to believe the closure related to anti-money laundering (AML) and know-your-customer (KYC) concerns that JPMorgan Chase may have linked to Strike users.
“During ongoing monitoring, we have identified concerning activity on your account or an account with which you are associated. Under the Bank Secrecy Act and other regulations, financial institutions are required to periodically review our customers’ relationships,” the letter added.
CoinDesk, seeking further clarity, has reached out to both parties for comment and to get to the bottom of this debanking saga.
Patricia Wexler, a spokeswoman for JPMorgan, declined to comment.
However, a source close to JPMorgan Chase told Coindesk that “JPMorgan banks crypto companies across the industry, provides payment services, and serves as a financial advisor.”
As the debate rages, Mallers has decided to put an end to the saga, at least for now. Strike’s press team declined to comment on the matter.
“We are not commenting further here,” said Alex Modiano, a spokesman for Mallers. Randall Woods, another senior press secretary for Strike, responded similarly.
What does all this mean? Although both sides remain silent, a source close to the banking giant cited privacy rules and other issues as an explanation. They also highlighted a Cato Institute »
A question of timing
Under the BSA, all banks are required to remain silent because Financial Crimes Enforcement Network (FinCEN) guidelines prohibit the disclosure of suspicious activity reports (SARs) to avoid alerting suspects to possible money laundering or other illicit financial investigations.
As for timing, IronWeave’s O’Regan suggested that the sudden closure of Mallers’ accounts could be linked to JPMorgan’s recent rollout of JPMCoin, which is similar to Strike.
They both move money extremely quickly, even though one, JPMCoin, is proprietary and bank-controlled, while the other, Strike, is open to the general public.
The removal of a potential future competitor, just weeks after JPMorgan launched its own token, raised questions of a potential conflict of interest, said O’Regan, who claimed that major US banks were silently removing crypto executives using the Banking Secrecy Act (BSA) as an excuse to provide no explanation.
“Removing the CEO of a major Bitcoin financial company while you are rolling out quasi-computing products could easily be seen as casting a shadow over a competitor,” he added.
