JPMorgan Faces Crypto Banking Fees Accusations by a16z

JPMorgan Accused of Anti-Crypto Finance Strategies

Recently, Andreessen Horowitz’s fintech division released statements regarding “Chokepoint 3.0”, pointing to JPMorgan as a major player in enhanced anti-crypto practices. This involves imposing high fees and selectively removing support for crypto platforms.

“Under the Biden administration, Operation Chokepoint 2.0 tried to debank and deplatform crypto. That era has ended, but now the banks are aiming to implement their own Chokepoint 3.0 — charging insanely high fees to access data or move money to crypto and fintech apps — and, more concerningly, blocking crypto and fintech apps they don’t like.” — a16z Fintech Team, Andreessen Horowitz

Under the Biden administration, previous attempts to limit crypto banking access were visible. Now, a16z’s analysis in their July newsletter suggests JPMorgan is pursuing measures to control and limit access to crypto via prohibitive banking practices.

Crypto Startups Face Rising Operational Costs

The potential financial impact suggests a steep increase in operational costs for crypto startups. This heightens barriers for service access in the crypto sector, triggering responses within the industry about banking fairness.

The warning posits consequences such as transactional cost increases and service eliminations. Relying on historical patterns, a16z notes past restrictions often result in reduced liquidity and stablecoin usage spikes as users navigate around traditional banking systems.

Echoes of Past Financial De-Risking Practices

Events echo the de-risking of exchanges from 2017 and Operation Choke Point’s impact between 2013-2015, with BTC and ETH highlighted as assets previously affected by such banking maneuvers.

Experts from Kanalcoin indicate the potential long-term effects on crypto markets might be severe, drawing parallels to earlier restrictions that led to notable liquidity challenges and decreased market stability.