Gemini issues statement on JPMorgan cutting ties with crypto exchange
- Gemini claimed all is well between the crypto exchange and the banking giant
- The report comes in days after US federal regulators issued a warning to banks
Gemini – a leading American-based crypto exchange – broke its silence on the ongoing reports of leading American banking institution – JPMorgan cutting ties with the crypto exchange. The crypto exchange claimed there was no change in its relationship status with the multi-national bank. Meanwhile, JPMorgan did not release a statement on the report as of press time.
The company’s statement on Twitter read,
“Despite reporting to the contrary, Gemini’s banking relationship remains intact with JPMorgan.”
The crypto exchange first forged an alliance with JPMorgan in May 2020 alongside another popular American crypto exchange – Coinbase. And, it was the first time America’s largest bank extended banking service to crypto firms. According to a report by Wall Street Journal, JPMorgan had agreed to provide cash management services and manage dollar-based transactions. This service was extended to only United States-based customers.
Gemini distances from Silvergate Bank
Notably, the report emerged right when Silvergate Bank – a crypto-focused financial service provider – is showing signs of distress. This resulted in several crypto-firms, including Gemini distancing 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 dire for Silvergate after it announced it would delay the release of its annual report in an SEC filing. Moreover, the filing raised doubts about survival as a going concern, resulting in its share price taking a diving in the market.
Moreover, given the recent collapses and bank run, the US federal regulators issued a warning to banks on crypto-related liquidity problems. 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 Currency.
These regulatory authorities stated that funding from crypto-related firms “may pose heightened liquidity risks to banking organizations.” The authorities stated the unpredictability of the scale deposit inflows and outflows as the reason for the risk. This is mainly because the crypto market is influenced by market events and uncertainty, market volatility, and other factors.