The dispute between traditional financial giants and crypto platforms is re-enacted, and this time the protagonists are two industry giants from the United States - one is JPMorgan Chase, known as the "leader of investment banks"; the other is the old cryptocurrency exchange Gemini. At about 2 a.m. on July 26, Beijing time, Gemini co-founder Tyler Winklevoss published an article angrily accusing JPMorgan Chase of refusing to provide data services to Gemini because of his previous remarks, attempting to use this to engage in unfair competition and stifle financial technology companies and crypto platforms. As soon as the news came out, many people in the crypto industry once again recalled the blow to crypto companies by the "Operation ChokePoint 2.0". Odaily Planet Daily will briefly sort out Gemini's encounter with "Financial Persecution 2.0" in this article for readers' reference.

Gemini is once again "choked" by JPMorgan: When bank data becomes a competitive tool

As the intersection of traditional finance and the cryptocurrency industry, user data has always been the top priority for traditional banks and crypto platforms. After all, the more comprehensive the KYC information is, the more corresponding protection settings will be set for user risk preferences, asset size, and even security levels, the clearer the user portrait will be, and the more convenient it will be for the platform to carry out business.

The focus of the dispute between Gemini and JPMorgan is bank data.

Just as Musk used the platform API interface as one of the profit sources after taking over Twitter, and Reddit also charged clients and third parties for accessing platform data, the "data business" has always been part of the platform economy with unclear ownership. After Gemini co-founder Tyler Winklevoss published an article on July 20 criticizing "JPMorgan Chase for depriving Gemini of the right to access bank data for free through the third-party platform Plaid, and instead charging financial technology companies high data access fees", JPMorgan Chase, as a top bank in the United States, naturally stopped being polite and directly issued a "death notice" to Gemini, saying that "after revoking Gemini's customer qualifications in the 'Opration ChokePoint 2.0' action, it has once again suspended the plan to re-accept Gemini as a customer."

There is no doubt that, just like the previous "Operation ChokePoint 2.0" action in which Bank of America refused to provide banking financial services to some cryptocurrency companies and start-up technology companies, this time JPMorgan's operation is still a unilateral oppression of the encryption platform by the traditional financial giant. At this point, we need to briefly review this "industry persecution" that makes people turn pale.

Operation ChokePoint 2.0: The banking industry’s crypto chokepoint

In 2023, affected by the crypto winter and their own bad businesses, several crypto-friendly banks including Silicon Valley Bank, Silvergate and Signature Bank went bankrupt one after another. Some industry insiders pointed out that this move may be affected by the Biden administration's pressure on banks to cut off business ties with cryptocurrency companies.

After that, Operation Chokepoint 2.0 gradually emerged from the shadows.

Marc Andreessen, founder of a16z, once revealed on the "Joe Rogan Experience Podcast": "Operation Chokepoint 2.0 is mainly aimed at political opponents of the government and unpopular technology startups. In the past four years, the bank accounts of more than 30 founders of technology companies have been closed. Obviously, this is not an isolated case." This matter was later forwarded and shared by Musk.

In December 2022, after business communications with JPMorgan Chase, Frax Finance founder Sam Kazemian also responded: "Although the alleged operations have not been confirmed, participants in the crypto industry face many challenges in ensuring the security of banking services."

Specifically, banks often have no clear reason for "refusing service", but the consequences are often extremely serious. Affected companies may be unable to open bank accounts, or even have their funds transferred restricted, or even face survival crises. In the face of the banking industry, which is inevitable in the modern financial system, both companies and individuals are like ants, unable to resist its tough financial hegemony.

It is worth mentioning that this action also paved the way for Trump’s coming to power. According to a16z founder Marc Andreessen: “This is why we ultimately support Trump. We cannot live in a world where a completely legal company is sanctioned by the US government due to improper regulatory procedures.”

On March 7 of this year, Trump publicly stated at the White House Crypto Summit that he would end Operation Chokepoint 2.0's crackdown on the crypto industry, which put an end to the "financial persecution" during the Biden administration.

JPMorgan's trick: using data business to bypass the U.S. Consumer Financial Protection Act

Another focus of the dispute between Gemini and JPMorgan is the Consumer Financial Protection Act mentioned by Gemini co-founder Tyler Winklevoss.

In 2024, based on a dormant legal power enacted by the U.S. Congress in 2010, the U.S. Consumer Financial Protection Bureau (CFPB) issued the "Final Rule on Personal Financial Data Rights", which requires financial institutions, credit card issuers and other financial providers to unlock personal financial data at the request of consumers and transfer it to another service provider free of charge, ensuring that consumers can access and share data related to bank accounts, credit cards, mobile wallets, payment applications and other financial products (including accessing or authorizing third parties to access transaction information, account balance information, information required to initiate payments, bill information to be paid, and basic account verification information, etc.). It is clearly mentioned that: "Financial service providers must provide this information free of charge."

The move was intended to reduce loan costs and improve customer service in the payment, credit and banking markets by promoting competition and consumer choice, but it has objectively enabled platforms such as cryptocurrency exchanges to have free access to user banking data and other information. Now, JPMorgan’s solution is, “Want user data? Sure, pay for it!”

The Wall Street Journal previously published

On the other hand, as part of the vested interest group, bankers are also working to sue the U.S. Consumer Financial Protection Bureau (CFPB), hoping to abolish the above-mentioned "open banking rules", end the open banking era, and indirectly curb the development of cryptocurrency platforms.

There is no doubt that this is not the first time, nor will it be the last time, that the U.S. banking industry has shown hostility towards the cryptocurrency industry. Recently, the American Bankers Association and other banking and credit union industry organizations jointly requested the U.S. Office of the Comptroller of the Currency (OCC) to suspend the review of banking license applications from crypto companies such as Circle, Ripple, and Fidelity Digital Assets, on the grounds that "these applications lack transparency, fail to meet public review standards, and pose serious legal risks to the banking system."

Caitlin Long, founder of crypto bank Custodia Bank, wrote that the question of whether a trust license can be used as a de facto bank license (including issuing loans + obtaining a Fed master account) with only 10-15% of the bank's capital requirements is likely to enter legal proceedings. But she also pointed out: "The response of the banking association to the fight is very intriguing. If the situation they are worried about eventually becomes a reality, why don't banks just transform themselves into trust companies and continue to operate their existing businesses with much lower capital requirements and supervision?"

Alexander Grieve, head of government affairs at venture capital firm Paradigm, said in response to the joint letter: “Banks and credit unions rarely agree on most issues. But they all seem to agree on one thing: they will finally face substantial competition from the crypto industry. ”

Conclusion: The war between the banking industry and crypto platforms has already begun

Regardless of how the "user data" dispute between Gemini and JPMorgan ends, there is no doubt that the war between the banking industry and cryptocurrency platforms has moved from the dark to the light. After the passage of the Stablecoin Act, the CLARITY Act, and the Anti-CBDC Surveillance State Act, the competition between the two in cross-border payments, daily life, commercial acceptance, etc. is bound to enter a white-hot stage. At that time, will the banking industry continue to dominate the crypto platforms, or will the crypto platforms overthrow the banking industry? The outcome of this dispute may still depend on Trump's thunderous measures.