Gemini's Relationship with JPMorgan Remains Intact


Gemini, a popular crypto exchange, has recently denied rumors that its banking relationship with JPMorgan was terminated. Despite reporting to the contrary, Gemini’s banking relationship remains intact with JPMorgan. This comes amid regulatory pressure and market outflows after the dramatic collapse of crypto exchange, FTX that keeps driving banks to reduce their exposure to cryptocurrency assets.

Signature Bank and Silvergate Bank are just two examples of which that have reduced their crypto services and exposure. In December, Signature Bank announced plans to reduce crypto services, return funds to customers, and close crypto-related accounts. Meanwhile, Silvergate disclosed plans to discontinue its digital assets’ payment network, claiming the termination was a “risk-based decision.”

Concerns that a liquidity crisis could lead to a bankruptcy filing increased last week after Silvergate postponed filing its annual 10-K financial report. Silvergate reportedly borrowed $3.6 billion from the U.S. Federal Home Loan Banks System (FHLB) to mitigate a surge in withdrawals. Similarly, Signature Bank borrowed nearly $10 billion from the FHLB system in the last quarter of 2022 due to liquidity issues related to the bear market and FTX’s bankruptcy.

These moves are impacting crypto firms, with Binance announcing in February that it would temporarily suspend bank transfers of U.S. dollars. A few weeks earlier, in January, the exchange said its SWIFT transfer partner, Signature Bank, would only process trades by users with U.S. dollar bank accounts over $100,000.The crypto industry is facing uncertainty about its future relationship with the banking system in the United States. As banks continue to reduce their exposure to cryptocurrency assets, crypto firms may face liquidity challenges and difficulty in accessing banking services.


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