Brian Armstrong, CEO of leading US-based cryptocurrency exchange Coinbase (NASDAQ:COIN), has publicly criticized JPMorgan's UK subsidiary, Chase UK, for its recent decision to ban all crypto-related transactions. Armstrong took to X (formerly Twitter) on Tuesday to condemn the move and urged UK crypto holders to close their Chase accounts in response.
Armstrong called out the bank for its "totally inappropriate" decision and urged UK officials, including Prime Minister Rishi Sunak and Economic Secretary Andrew Griffith, to investigate whether Chase UK's actions align with the country's policy goals. He expressed hope that the bank might reconsider its decision after an official review.
On Tuesday, Chase UK confirmed to Cointelegraph that it had indeed decided to ban all crypto-related transactions due to a high level of fraud associated with such transactions. The bank stated that any attempt by customers to make a crypto-related transaction would be declined.
Armstrong's criticism comes as Coinbase continues its aggressive expansion efforts in the UK and Europe. The company announced in April 2023 that it was working "seriously" in these regions. According to Coinbase's official website, the platform supports users in the UK, the US, Europe, and Canada. As per InvestingPro data, Coinbase has a market cap of 16.90B USD, with a revenue of 2.58B USD.
However, while expanding overseas, Coinbase has been dealing with legal challenges at home. In June 2023, the US Securities and Exchange Commission filed a lawsuit against Coinbase for alleged violations of securities laws. This comes amidst a declining trend in earnings per share and a generally high price volatility, as noted by InvestingPro Tips.
Chase UK's decision to ban crypto transactions is part of a wider trend among financial institutions turning their back on digital assets. The bank cited an increase in scams and fraud related to cryptocurrencies as the reason for its decision. Chase UK has attracted more than 1.6 million customers since it opened the mobile app-based bank in 2021.
The move has sparked debate among the crypto legal community. William Garner, Partner at law firm Charles Russell Speechlys, stated that it would be interesting to see if this becomes a publicly disclosed formal policy, noting that crypto-related businesses have found it challenging to get traditional corporate bank accounts in recent years.
Garner also discussed the implications of this development in the context of the recent 'de-banking' debacle, where regulators are considering banks' ability to discriminate, particularly where there is no actual risk to the bank. It's worth noting that Coinbase's stock has taken a significant hit over the last week, with a 1 Week Price Total Return of -8.02% according to InvestingPro data. Additionally, Coinbase does not pay a dividend to shareholders, as pointed out by InvestingPro Tips.
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