JPMorgan won’t comment on FNB crypto ‘pressure’

JPMorgan has declined to comment on suggestions that it pressured First National Bank, through parent FirstRand, to shut the bank accounts of South African cryptocurrency exchanges.

TechCentral reported on Friday — citing well-placed sources claiming to have knowledge of the situation — that JPMorgan wrote to FirstRand CEO Alan Pullinger demanding that the banking group not work with companies that deal in cryptocurrencies.

Luno, VALR.com and other local exchanges recently received letters from FNB in which the bank informed them that they would be shutting their bank accounts next year. Some have already opted to move to other banks that will provide them with banking services.

JPMorgan and FNB are what are known as “correspondent” banks. This means FNB works with JPMorgan to settle foreign exchange transactions from its customers.

That JPMorgan pressured FNB is an “open secret” in the local bank, one source said on Monday.

“FNB can confirm that it has given reasonable notice to terminate its banking services to virtual currency exchanges and intermediaries trading in virtual currency,” the bank said in an e-mailed statement in response to questions on Friday.

Correspondence

FNB did not specifically deny that FirstRand had received correspondence from JPMorgan, but said there was “no link between the bank’s decision to close virtual currency exchanges” and any “external party”.

“We further confirm and emphasise that this decision did not involve any consultation with any third party. As previously communicated, FNB considers this to be a prudent course of action following a comprehensive review of the potential risks currently associated with these entities, particularly given that appropriate regulatory frameworks are not yet in place,” it said.

In February, JPMorgan said it had become the “first US bank to create and successfully test a digital coin representing a fiat currency”. In 2017, Its CEO, Jamie Dimon, labelled bitcoin a “fraud” and said he’d fired any employee of the bank trading in cryptocurrencies.  — (c) 2019 NewsCentral Media