The top executive of the US’ largest bank, Jamie Dimon, reiterated his long-held stance against cryptocurrencies in front of a panel of lawmakers at a Senate hearing on Wednesday.
The JPMorgan CEO was questioned by Sen. Elizabeth Warren about why crypto is an attractive tool for malicious actors like terrorist groups and drug traffickers. To this, he noted always being “deeply opposed” to the likes of Bitcoin and would, therefore, want to cease its operation.
“If I was the government, I’d close it down”, added Dimon, saying that crypto can easily bypass government controls.
According to him, its “only true use case” is by “criminals, drug traffickers” and other corrupt individuals who want to avoid taxes and money laundering laws. The CEO had labelled crypto tokens as “decentralised Ponzi schemes” when he was testifying before US lawmakers last year.
In September, JPMorgan’s digital bank Chase implemented a ban on crypto payments for its UK-based customers. While they were allowed to use other banks or providers to invest in their crypto portfolios, the bank’s email to clients noted:
“We’ve made this decision because fraudsters are increasingly using crypto assets to steal large sums of money from people. Declining these payments is one of the ways we are helping keep you and your money safe.”
Anti-money laundering laws
Lawmakers in the US have been working on guidelines in order to extend their reign on the cryptocurrency industry. Sen. Warren is currently pushing for her bill which is called the ‘Digital Asset Anti-Money Laundering Act’.
It seeks to bring crypto miners, validators, wallet providers and others under the purview of the Bank Secrecy Act requirements, including know-your-customer rules.
Dimon’s remarks were expressed to the Senate Committee on Banking, Housing, and Urban Affairs on Wednesday. They contemplated anti-money laundering rules, where Warren asked the panel of bank executives whether they agreed that crypto should follow the same procedures that their banks follow.
“When it comes to banking policy, I am not usually holding hands with the CEOs of multibillion dollar banks, but this is a matter of national security”, clarified Warren.
The group, which included Wells Fargo & Company CEO, Charles Scharf, Bank of America CEO, Brian Moynihan and Goldman Sachs CEO, David Solomon, collectively replied saying “Absolutely”.
The ‘hypocrisy’
While Dimon’s anti-crypto comment is not a new sight, people in the industry were quick to point out JPMorgan’s significant foray into blockchain. The banking behemoth’s ‘JPM Coin‘ record-keeping service runs on the same technology that powers Bitcoin and other digital currencies.
In October, it launched a blockchain-based tokenisation platform called the Tokenised Collateral Network (TCN). TCN settled its first trade for leading asset management giant BlackRock.
Back in 2021, JPMorgan contributed to a $65 million funding round for Ethereum infrastructure firm Consensys.
Popular crypto lawyer, John Deaton, also hit back at Dimon, calling him a “hypocrite”. He noted how the banks worldwide have paid $380 billion in fines this century.
Many also highlighted how JPMorgan is the second-largest penalised bank in the world. According to Good Jobs First’s violation tracker, it has paid about $39.3 billion in fines across 272 violations since 2000.
Around $38 billion of these fines were issued under Dimon’s reign, who has been the CEO since 2005.
Some of the major fines paid by the bank include the $75 million settlement with the US Virgin Islands allegedly enabling and financially benefiting from Jeffrey Epstein’s sex trafficking operation and the $13 billion chunk paid for fraudulently misleading investors over “toxic” mortgage deals. The latter has been the largest fine in its corporate history till date.
