JPMorgan has temporarily shelved plans to resume its banking relationship with the cryptocurrency exchange Gemini.
This decision comes in light of public criticism from Gemini’s leadership regarding JPMorgan’s stance on third-party access to financial data. The broader context involves ongoing tensions within the financial sector, particularly those surrounding data portability and the use of Plaid, a popular data aggregator that helps fintech and crypto firms connect users’ bank accounts.
Gemini representatives stated that they were previously offboarded by JPMorgan. Recent attempts to rejoin the bank’s client roster have faced these data access issues as a key concern.
Growing concerns over data sharing and aggregator practices
At the heart of this disagreement is an industry debate around the 2023 Open Banking Rule, which was implemented by the US Consumer Financial Protection Bureau. The rule emphasizes consumers’ rights to share their financial data with trusted applications, including those used for cryptocurrency transactions.
JPMorgan officials highlighted concerns about unregulated data collection by aggregators such as Plaid. They claimed that Plaid makes nearly 2 billion monthly API calls to user accounts, the majority of which were initiated without direct consumer consent. The bank argued that this level of access poses significant security risks and cited tens of millions of dollars in fraud linked to aggregator traffic over the past year.
JPMorgan proposed a regulated solution where they believe fair data access costs should be under ten cents per user per month. The bank emphasized that while they support controlled and cost-effective data sharing, they are wary of practices they see as overly intrusive and risky.
Gemini co-founder Tyler Winklevoss went public with accusations against JPMorgan and other financial institutions, alleging their actions in limiting access to customer banking data were part of a broader strategy to marginalize fintech and cryptocurrency businesses. This narrative included references to what some in the crypto industry term as “Operation ChokePoint 2.0,” an alleged systematic effort by banks and regulators to cut off critical services from digital asset firms.
Despite these challenges, JPMorgan stated that it continues to serve several crypto-related businesses and actively onboards new clients in this sector. The bank’s spokesperson rejected claims of an intent to block fintech or cryptocurrency firms, instead focusing on their concerns over uncontrolled data harvesting practices by third-party aggregators.
Notably, ten crypto firms recently issued a joint letter to former President Donald Trump, urging him to take action in support of consumer rights to control and share their financial data under the Open Banking Rule.
