- Gemini claimed that all is well between the crypto exchange and the banking giant
- The report comes days after US federal regulators issued a warning to banks
Gemini – a leading US crypto exchange – broke its silence over the ongoing reports from the leading US banking institution – JPMorgan cut ties with the crypto exchange. The crypto exchange claimed that there was no change in relationship status with the multinational bank. Meanwhile, JPMorgan has not yet released a statement on the report at the time of writing.
The company’s statement on Twitter read,
“Despite reports to the contrary, Gemini’s banking relationship with JPMorgan remains intact.”
The crypto exchange first forged an alliance with JPMorgan in May 2020 alongside another popular US crypto exchange – Coinbase. And it was the first time America’s largest bank expanded banking services to crypto companies. According to a Wall Street Journal report, JPMorgan had agreed to provide cash management services and manage dollar-based transactions. This service was extended to customers based in the United States only.
Gemini distances from Silvergate Bank
Notably, the report emerged at a time when Silvergate Bank — a crypto-focused financial services company — is showing signs of distress. This resulted in several crypto companies, including Gemini, moving away from the bank. The crypto exchange had stated that it has stopped accepting deposits and processing withdrawals through Silvergate.
The cryptocurrency bank is facing a bank run since the collapse of the once popular crypto exchange – FTX. And things got dire for Silvergate after it announced it would delay the release of its annual report in an SEC filing. In addition, the filing cast doubt on its continued existence as a going concern, causing its share price to plunge in the market.
In addition, given the recent collapses and bank run, US federal regulators have issued a warning to banks about crypto-related liquidity issues. And the panel consisted of the board of directors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of Currency.
These regulators stated that financing of crypto-related companies “may pose heightened liquidity risks to banking organizations.” The authorities cited the unpredictability of scale deposit inflows and outflows as the reason for the risk. This is mainly because the crypto market is affected by market events and uncertainty, market volatility and other factors.