JPMorgan Chase Freezes Accounts of 2 Stablecoin Companies Doing Business in Venezuela

JPMorgan Chase reportedly froze accounts used by stablecoin startups BlindPay and Kontigo because they did business in Venezuela and other places subject to sanctions or other restrictions.

Both companies largely focus on Latin America, and they connected to the bank through digital payments firm Checkbook, The Information reported Friday (Dec. 26).

A JPMorgan Chase spokesperson said in the report: “This has nothing to do with stablecoin companies. We bank both stablecoin issuers and stablecoin-related businesses, and we recently took a stablecoin issuer public.”

Checkbook CEO PJ Gupta said in the report that BlindPay and Kontigo were among the firms responsible for a sharp rise in chargebacks that led JPMorgan Chase to close their accounts. Gupta added that the chargebacks were caused by new customers of the stablecoin companies.

“It is just because they opened the floodgates and a bunch of people came in over the internet,” Gupta told The Information.

Kontigo Co-founder Jesus Castillo said in the report that his company was facing issues through Checkbook and that claims by a not-for-profit group that Kontigo was helping move money out of Venezuela without identification checks were false and that the company had launched legal action against the organization.

Reached by PYMNTS, BlindPay said in a statement that it operates with full transparency with all financial institution partners; conducts all regulated activities through fully authorized and licensed financial institution partners; and invests heavily in compliance, governance and oversight.

BlindPay added that after a recent incident, it discontinued service to certain higher-risk jurisdictions.

“To be unequivocally clear: this matter did not involve Anti-Money Laundering violations, sanctions breaches, or any regulatory non-compliance,” BlindPay said. “The issue was operational in nature, stemming from payment reversals (ACH returns and wire recalls) that required enhanced due diligence and stricter customer verification protocols.”

The company added that it further strengthened its operations and increased its operational resilience, and that many customers who had paused their service have since returned.

“Despite discontinuing service to Venezuela and other high-risk jurisdictions, the business has grown substantially,” BlindPay said.

JPMorgan Chase and Checkbook announced in November 2024 that Checkbook was joining the J.P. Morgan Payments Partner Network in a partnership that would enable the bank’s corporate clients to send digital checks.

Checkbook expanded its payment operations in August 2024, saying it had streamlined check and payment options for B2B use cases across the United States even as it saw growing interest for industries like the rental, legal, government and banking sectors.

It was reported in April 2024 that a Venezuelan opposition politician and a national security leader at blockchain data firm Chainalysis said that democratic governments should set up structures to combat money laundering because Venezuelan President Nicolas Maduro had attempted to use crypto for “moving illicit proceeds into the international financial system” and was expected to continue doing so after the U.S. reimposed oil sanctions on the country.