On Sunday, Hayden Adams, CEO and founder of the popular decentralized exchange or DEX, Uniswap (Unite), claiming his JPMorgan bank account was closed without explanation. Furthermore, Adams stated that the incident was personal in nature, as he was aware of “many individuals and companies that have been attacked similarly simply because of their work in the crypto industry.”
I know a lot of individuals and companies who have been attacked similarly simply because they work in the crypto industry
Thanks for making it personal
— hayden.eth (@haydenzadams) January 23, 2022
Former Commodities Futures Commissioner Brian Quintenz Responds Comment It was suggested that the move could be an example of the “shadow debanking of cryptocurrencies by the Federal Reserve and the Office of the Monetary Bank Examiner.”
Quintenz explained that the contract prohibits the bank from telling the customer the reason for terminating the business relationship if the bank deems it too risky. While most users expressed sympathy for Adams’ alleged going to the bank, others insisted that there was no universal right to bank accounts, and that banks therefore had discretion to act.
May be the shadow debanking of cryptocurrencies @USFederal Reserve or @USOCC Bank examiner, instructing from top to bottom.If the examiner tells the bank that a customer is too risky and the bank terminates the relationship, the bank is contractually not allowed to tell the customer why
— Brian Quintenz (@BrianQuintenz) January 23, 2022
Quintenz did not provide any further information to support his claim, but provided a link to an opinion piece by Wyoming Senator Cynthia Lummis post In the November issue of The Wall Street Journal. In the article, Lummis criticized the Federal Reserve for failing to register several Wyoming-based cryptocurrency-related special-purpose depository institutions (SPDIs) as banks, preventing them from accessing the federal payments system.
In another response to Adams’ post, Kraken CEO Jesse Powell quote His 2018 tweet described how JP Morgan Chase closed the cryptocurrency exchange’s payroll account with five days’ notice sent by mail.
A customer’s risk level to a bank is usually assessed in terms of regulatory compliance.Although the motive for the cancellation of the banking business is unclear, the SEC initiated a probe Last September, we briefed DEX developers on the marketing and investor services they provide.
Under U.S. financial regulations, broker-dealers must register with the Financial Industry Regulatory Authority (FINRA) before they can facilitate customer transactions. However, because funds are stored in consumers’ wallets rather than the Uniswap DEX, and cryptocurrencies are not securities, Uniswap, like other DEXs and decentralized finance protocols, does not require registration with the relevant regulators. according to For CoinGecko, Uniswap is currently the largest DEX in the world with a 24-hour trading volume of $2.74 billion.