Chokepoint 2.0? JPMorgan freezes accounts of two stablecoin startups due to sanctions on Venezuela

U.S. sanctions against Venezuela have extended to the financial sector. JPMorgan (JPMorgan) recently froze accounts of two stablecoin startups, Blindpay and Kontigo, sparking another confrontation between the banking system and crypto companies. The bank has consistently denied any suppression, emphasizing that it is compelled by current regulations.

The urgent freeze of banks and startups: Why did JPMorgan take action?

According to The Information, JPMorgan recently froze accounts of the stablecoin payment companies Blindpay and Kontigo, supported by the well-known startup accelerator Y Combinator. The reason appears to be related to their services involving high-risk sanction regions such as Venezuela.

It is understood that both companies established connections through U.S. payment company Checkbook and JPMorgan, and the bank responded immediately upon learning of this.

JPMorgan emphasizes that this action is unrelated to “cracking down on stablecoins or crypto companies”: “We provide banking services to stablecoin issuers and related businesses, and recently helped a stablecoin issuer go public.”

It is understandable that, faced with potential legal risks that could attract the attention of the U.S. Securities and Exchange Commission (SEC) or the Treasury Department, banks must understand their clients’ transaction counterparts and sources of funds to avoid crossing regulatory lines.

(JPMorgan Dimon: Current regulations force banks to close accounts, not political or religious factors)

Chokepoint 2.0? Is the crypto industry being targeted?

Since the Biden administration, enforcement and suppression actions surrounding the crypto industry and traditional finance, known as “Chokepoint 2.0,” have been ongoing.

Including Trump Media CEO Devin Nunes, Strike CEO Jack Mallers, ShapeShift Marketing Director Houston Morgan, and over 30 other tech and crypto industry founders, have accused JPMorgan of unjustified account closures or service refusals.

(U.S. OCC: JPMorgan, Citigroup, and eight other major banks will continue to pursue crypto industry enforcement according to law)

Trump’s tougher stance: intercept oil tankers and seize oil

Returning to the current context, the Trump administration has once again escalated its comprehensive crackdown on Venezuela. Over the past two weeks, the U.S. has intercepted and detained two oil tankers loaded with Venezuelan oil. Trump sarcastically commented:

Maybe we will sell it, maybe we will keep it, or maybe we will use it for strategic reserves.

It is reported that recent sanctions focus on PDVSA, the Venezuelan state-owned oil company, which has been blacklisted since 2019. The U.S. Treasury Department accuses the country’s oil revenue of supporting the Maduro regime, and on December 11, sanctioned six shipping companies involved in transporting oil, suspected of falsifying navigation data or closing positioning.

How startups respond to geopolitical pressure and banking regulation

Under tightening sanctions and sensitive geopolitical environments, banks must exercise greater caution regarding any financial flows involving high-risk sanctioned countries.

For JPMorgan, crypto payment companies that have dealings with sanctioned regions face higher scrutiny than traditional businesses. As a result, they tend to act preemptively to avoid regulatory scrutiny.

This article, Chokepoint 2.0? JPMorgan freezes accounts of two stablecoin startups due to sanctions on Venezuela, first appeared on Chain News ABMedia.