Key Takeaways:
- JPMorgan Chase CEO Jamie Dimon has urged US lawmakers to shut down cryptocurrency transactions.
- Dimon alongside CEOs of BNY Mellon, Bank of America, Morgan Stanley, State Street, and Citigroup called for crypto firms to be subject to the same AML laws as US banks.
- Crypto proponents called Dimon a hypocrite for his anti-crypto stance while leading a bank that has been penalized $38 billion for financial violations since he took over in 2005.
Jamie Dimon, the chairman and chief executive of American banking behemoth JPMorgan Chase, has come out lashing cryptocurrencies. In a Senate Banking Committee hearing regarding the oversight of Wall Street firms, the billionaire urged lawmakers to completely ban the $1.7 trillion industry.
“If I was the government, I’d close it down,” proclaimed Dimon.
The JP Morgan CEO’s response came to a question by Massachusetts Senator Elizabeth Warren, who claimed that terrorist groups like Hamas and the sanctioned North Korean government were using cryptocurrencies to fund their various illicit activities.
Billionaire CEO Of JPMorgan Wants To Ban All Crypto Transactions
Dimon, whose net worth is estimated to be $1.8 billion, said that he has always been “deeply opposed” to crypto, explaining that the “only true use case” for the digital assets is by criminals, drug traffickers, and other dangerous individuals who seek to avoid paying taxes and exploit money-laundering laws.
The billionaire CEO was testifying before the Senate Committee alongside other banking executives, including Charles Scharf of Wells Fargo, Brian Moynihan of Bank of America, Jane Fraser of Citigroup, Robin Vince of BNY Mellon, David Solomon of Goldman Sachs, James Gorman of Morgan Stanley, and State Street CEO Ronald O’Hanley.
When Senator Warren questioned the chief executives on whether crypto companies should be subject to the same Anti-Money Laundering (AML) rules that US banks are obligated to, all of them responded affirmatively.
Warren, who is usually a harsh critic of the banking industry, said she was not “holding hands with the CEOs of multi-billion dollar banks” but was doing so as a matter of national security. She asked the US Congress to act and bar “terrorists, drug traffickers, and rogue nations” from using crypto to finance their “dangerous activities”.
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JPMorgan Busy Introducing Blockchain-Based Initiatives Despite CEO’s Anti-Crypto Stance
Dimon has long been critical of cryptocurrency, going as far as calling Bitcoin (BTC) a “hyped-up fraud” and likening it to a “pet rock”. His stance against crypto comes despite JPMorgan recently launching the JPM token on a privatized version of the Ethereum (ETH) network for the bank’s institutional clients to help them maintain records of their transactions.
In October, the banking giant launched the Tokenized Collateral Network (TCN), a blockchain-based tokenization platform that allows clients to transfer the ownership of collateral without physically moving the assets.
JPMorgan conducted its first collateralized trade on TCN between BlackRock and Barclays with the asset manager turning shares of one of its money market funds into digital tokens, which were then transferred to the British bank as security for an over-the-counter derivatives exchange between the two firms.
Crypto Advocates Call Jamie Dimon A Hypocrite Over His Remarks
Crypto proponents wasted no time to call out the blatant hypocrisy in Dimon’s statements.
VanEck strategy advisor Gabor Gurbachs said that Dimon is in no position to criticize Bitcoin with the kind of track record JPMorgan has. He pointed out that the megabank was the second most penalized financial institution in the world with close to $40 billion paid in fines for 272 violations since 2000.
Out of these fines, about $38 billion came under the watch of Dimon, who was appointed CEO in 2005.
Famed crypto lawyer John Deaton called him a “f***** hypocrite”, highlighting that the bank has been fined over $35 billion for illicit and fraudulent activities just in the last five years.
In September, the bank agreed to pay $75 million to the US Virgin Islands over allegations that it enabled and benefitted from Jeffrey Epstein’s sex tracking operations between 2002 and 2005.
JP Morgan also paid the single-largest fine in corporate history at $13 billion in 2013 for promoting “toxic” mortgage deals that led to investors losing significant value on their investments, causing the market to collapse.
In 2020, several traders associated with the bank who were being investigated by authorities for manipulating metal futures markets between 2008 and 2016 agreed to pay nearly $1 billion to settle the case.
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Crypto And Blockchain Technology a Direct Threat To The Traditional Fiat Currency System
Meanwhile, the crypto-focused education group CEDAR Innovation Foundation released a statement saying Senator Warren’s anti-crypto claims proved her “lack of understanding of blockchain technology”.
While arguing that it was misleading to claim that cryptocurrency facilitates illicit financial transactions “any more so than” traditional fiat currency, the group noted that the statements by the Senator and the bank CEOs indicate that crypto, decentralized finance, and blockchain technology are a “direct threat to the traditional financial system.”
