Cryptocurrency

Crypto is for criminals? JPMorgan has been fined $39B and has its own token

JPMorgan CEO Jamie Dimon is being hauled over the hot coals on crypto X (Twitter) after claiming Bitcoin (BTC) and cryptocurrency’s “only true use case” is to facilitate crime.

“The only true use case for it is criminals, drug traffickers, money laundering, tax avoidance,” Dimon said in a hearing before the United States Banking Committee on Dec. 5. “If I were the government, I’d close it down.”

But crypto pundits quickly pointed out the seeming hypocrisy in Dimon’s statements, highlighting that JPMorgan is the second largest penalized bank, having paid $39.3 billion in fines across 272 violations since 2000, according to Good Jobs First’s violation tracker.

About $38 billion of these fines came under Dimon’s watch, who commenced as CEO in 2005.

“Talk about being a fucking hypocrite!” said crypto lawyer John Deaton in a Dec. 6 post on X. 

“Jamie Dimon is in no position to criticize Bitcoin with this sort of track record,” said VanEck strategy adviser Gabor Gurbacs, who noted that banks worldwide have paid $380 billion in fines this century.

The Dimon-led bank agreed to a $75 million settlement with the U.S. Virgin Islands in September over allegations that it enabled and financially benefitted from Jeffrey Epstein’s sex trafficking operation between 2002 and 2005 — it should be noted that settlements aren’t admissions of guilt.

Ten years ago, the bank paid the largest fine in its corporate history at $13 billion in October 2013 for fraudulently misleading investors over “toxic” mortgage deals. Toxic Investments are ones that fall in value significantly, causing the market to collapse.

Several JPMorgan traders were also investigated for manipulating various metals futures markets between 2008 and 2016 and agreed to pay nearly $1 billion to settle the investigation in September 2020.

Penalties paid by JPMorgan over various violations. Source: Good Jobs First.

JPMorgan was also at the center of the largest cocaine bust in U.S. history when 20 tons or 18,140 kilograms of cocaine, worth $1.3 billion, was seized in July 2019 on a ship reportedly owned by a fund run by JPMorgan.

Dimon says he’d shut crypto down, but JPMorgan has its own token

The JPMorgan CEO said, “If I was the government, I’d close it down,” in a concluding statement to U.S. Senator Elizabeth Wallet at the hearing, referring to Bitcoin and cryptocurrency.

However, despite being “deeply opposed” to the digital asset sector, Dimon and JPMorgan recently launched its own crypto token — JPM Coin — on a private version of the Ethereum blockchain, for its institutional client base.

The bank also rolled out a blockchain-based tokenization platform in October, with BlackRock as one of its clients. It also contributed to a $65 million funding round for Ethereum infrastructure firm Consensys in April 2021.

Related: JPMorgan subsidiary Chase UK to restrict crypto transactions

However, it could be presumed that Dimon was distinguishing between cryptocurrencies with a centralized force behind them and ones that don’t, as he has referred to decentralized currencies as ponzi schemes in the past.

Bankless also criticised Dimon’s comments, explaining that the U.S. government cannot impose an effective ban on Bitcoin or the cryptocurrency sector due to its decentralized nature.

Dimon’s comments triggered a Community Notes fact check on X, stating that less than 1% of cryptocurrency transactions are illicit.

Added context to Dimon’s comments X’s Community Notes. Source: X.

Magazine: Lawmakers’ fear and doubt drives proposed crypto regulations in US

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