When a Wall Street banking giant and a cryptocurrency CEO start a public fight 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, saying that JPMorgan closed all of his accounts for no reason.
“Last month (September 2), JP Morgan Chase kicked me out of the bank,” Mallers said in a post on X. “It was strange […] Every time I asked them why, they said the same thing: ‘We can’t tell them.’”
The post went viral and received reactions from personalities including Tether CEO Paolo Ardoino, who said, “I think it’s for the best,” and Grant Cardone, a billionaire real estate magnate and equity fund manager, who, in an X post, called for a boycott and announced that he transferred all his assets out of JPMorgan.
Bo Hines, former digital asset advisor to President Donald Trump and now strategic advisor to Tether, reminded the bank in X “you guys know Operation Chokepoint is over, right? I’m just checking.” After the crypto-friendly president took office, regulators revoked many Biden-era directives against crypto entities.
“Unfortunately, Operation Chokepoint 2.0 is still alive,” said Senator Cynthia Lummis. “Policies like JP Morgan’s undermine trust in traditional banks and send the digital asset industry overseas.”
While a banking giant unseating a company is not unusual and often goes unreported, this hit a nerve in the crypto community, given Mallers and Strike’s positions in the industry and the US government’s previous crackdowns.
“While big banks frequently freeze accounts, it’s hard to ignore the timing of Mallers’ debanking of JPMorgan,” said Timothy O’Regan, emerging market funds expert and founder of IronWeave.
The unbanking letter
Mallers sat and read JPMorgan Chase’s (JPMC) debanking letter for two months before exposing it. In it, the bank notified the founder of Strike, a bitcoin payment app with approximately 800,000 monthly active users, that it closed his accounts due to concerning activity.
“We have decided to close your accounts,” Chase’s letter to Mallers says, leading many to believe the closure was related to anti-money laundering (AML) and know-your-customer (KYC) concerns that JPMorgan Chase may have linked to Strike users.
“During the course of ongoing monitoring, we identify activities related to 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 customer relationships,” the letter adds.
CoinDesk, seeking more clarity, has reached out to both parties for comment and to get to the bottom of this debanking saga.
JPMorgan spokeswoman Patricia Wexler declined to comment.
However, a source familiar with JPMorgan Chase told Coindesk that “JPMorgan banks crypto companies across the industry, provides payments services and acts as a financial advisor.”
While the debate continues, Mallers decided to put the saga aside, at least for now. Strike’s media team declined to comment on the matter.
“We will have no further comment here,” said Mallers spokesman Alex Modiano. Randall Woods, another Strike press officer, responded in kind.
What does all this mean? While both sides remain silent, a source familiar with the banking giant pointed to secrecy rules and other issues by way of explanation. They also pointed to a Cato Institute
a matter of time
According to the BSA, all banks are required to remain silent because FinCEN (Financial Crimes Enforcement Network) guidance prohibits the disclosure of suspicious activity reports (SARs) to avoid alerting suspects to potential money laundering or other illicit financial investigations.
As for the timing, IronWeave’s O’Regan hinted that the sudden closure of Mallers’ accounts could be related to JPMorgan’s recent launch of JPMCoin, which is similar to Strike.
Both move money extremely quickly, although one, JPMCoin, is exclusive and controlled by the bank, while the other, Strike, is open to the general public.
Unbanking a potential future competitor, just weeks after JPMorgan launched its own token, raised questions about a potential conflict of interest, said O’Regan, who claimed that big US banks are quietly unseating cryptocurrency executives using the Bank Secrecy Act (BSA) as an excuse not to explain themselves.
“Dislodging the CEO of a major bitcoin finance company while launching quasi-computer products could easily be perceived as casting a shadow over a competitor,” he added.
