JPMorgan Chase & Co. agreed to take on two Bitcoin exchanges as banking clients in a move that shows the company getting more comfortable with an industry its top leader once spurned.
The firm added Coinbase Inc. and Gemini Trust Co. as banking customers in its corporate and investment bank in April, and will primarily be helping the virtual exchanges manage cash in the U.S., according to a person with knowledge of the matter. JPMorgan won’t be handling any cryptocurrency transactions, said the person, who asked not to be identified because the information is private.
Representatives for JPMorgan, Gemini and Coinbase declined to comment. The two exchanges handle cryptocurrencies including Bitcoin, Ether and Litecoin.
JPMorgan, biggest U.S. bank, conducted due diligence for months on the firms and the fact that the two exchanges are regulated and registered as money transmitters with the Financial Crimes Enforcement Network helped assuage compliance concerns related to Bitcoin. Money transmitters, like banks, are required to monitor for suspicious activity such as potential money laundering and disclose any instances to FinCEN.
In September 2017, JPMorgan Chief Executive Officer Jamie Dimon called Bitcoin a “fraud” and threatened to fire any employee caught trading it. He later said he regretted the comments and has repeatedly said since that he sees many ways for the bank to use blockchain technology.
Last year, the bank said it was turning to crypto to help speed up corporate payments through a token dubbed JPM Coin based on blockchain technology.
The Wall Street Journal reported the JPMorgan client additions earlier Tuesday.