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- Uniswap founder’s account has been halted by JP Morgan Chase without any explanation
- Hayden Adams highlighted that the incident was personal as he knew several individuals and firms who have been similarly targeted simply for working in the digital currency ecosystem
- Brian Quintenz that the move was likely an instance of shadow de-banking of crypto by Federal Reserves and Office of the Comptroller of the Currency bank examiners
Uniswap is one of the largest decentralized exchanges (DEX) platforms. On Sunday, Hayden Adams, the CEO and founder of the DEX, claimed that his JP Morgan Chase bank accounts were halted without any explanation. Additionally, Adams highlighted that the incident was personal in nature as he knew several individuals and firms who have been similarly targeted simply for working in the digital currency ecosystem. According to Brian Quintenz, the former CFTC commissioner, banks aren’t required to shut down accounts owned by clients who are considered too risky.
Uniswap founder’s bank account ceased
JP Morgan Chase has shut down Uniswap founder’s bank account without explanation. Following the measures, the former commissioner of Commodity Futures Trading (CFTC) responded with a comment suggesting that the move was likely an instance of shadow de-banking of crypto by Federal Reserves and the Office of the Comptroller of the Currency bank examiners.
Brian further explained that banks are contractually prevented from telling customers the reasons for ending the business relationship if they consider them too risky.
Most users sympathize with Adams on the alleged de-banking and several claims that there is no universal right to a bank account. Therefore, banks have the discretion to act as they consider fit.
FED criticized for its failure to register crypto SPDIs
The former CFTC commissioner did not offer further information to support his claims. However, he highlighted a link to Wyoming Senator Cynthia Lummis’ opinion piece published in the Wall Street Journal in November. Notably, in the article, Lummis criticized the Federal Reserve for its failure to register several Wyoming-based, crypto-related SPDIs as banks. Thus, preventing them from getting access to their payments system.
Risk assessment is based on regulatory compliance
According to experts, a customer’s risk level to a bank is typically assessed based on regulatory compliance. However, the motives of the de-bankings are yet to be cleared. Still, the US Securities and Exchange Commission (SEC) initiated a probe last year into Uniswap DEX’s developers regarding the marketing and investor services they provide.
In the United States, broker-dealers are required to register with the Financial Industry Regulatory Authority (FinRA) before facilitating such services to clients. However, as funds are stored in client wallets rather than Uniswap, crypto assets are not classified as securities. And Uniswap does not need to register with relevant regulatory bodies.
