Coinbase CEO Urges UK Customers to Leave Chase Due to Crypto Transaction Ban

Brian Armstrong, the CEO of prominent US cryptocurrency exchange Coinbase, has publicly criticized JPMorgan’s UK division, Chase UK, for its decision to prohibit all crypto-related transactions. Armstrong took to X (formerly Twitter) on Tuesday to denounce the ban and encouraged UK crypto holders to close their Chase accounts as a form of protest.

He described the bank’s action as “totally inappropriate” and called on UK officials, including Prime Minister Rishi Sunak and Economic Secretary Andrew Griffith, to examine whether Chase UK’s decision aligns with the country’s economic objectives. Armstrong expressed hope that the bank would reconsider its stance following an official review.

In a statement on Tuesday, Chase UK confirmed that it made the decision to ban all crypto-related transactions due to a concerning level of fraud linked to such activities. The bank emphasized that any attempts by customers to engage in crypto-related transactions would be declined.

Armstrong’s remarks come at a time when Coinbase is actively expanding in the UK and Europe. The company announced in April 2023 that it was making significant efforts in these markets. According to available data, Coinbase supports users in the UK, US, Europe, and Canada, boasting a market capitalization of approximately $16.90 billion and a revenue of $2.58 billion.

Despite its international growth, Coinbase is facing legal challenges domestically. In June 2023, the US Securities and Exchange Commission filed a lawsuit against the company for alleged violations of securities laws. This legal scrutiny coincides with a downturn in earnings per share and notable price volatility for the firm.

Chase UK’s decision reflects a broader trend among financial institutions distancing themselves from digital assets. The bank cited a rise in scams and fraud associated with cryptocurrencies as the primary reason for its ban. Since launching its mobile banking app in 2021, Chase UK has gained over 1.6 million customers.

This decision has sparked discussions within the crypto legal community. William Garner, a partner at the law firm Charles Russell Speechlys, noted that it would be interesting to see if Chase UK’s stance becomes a publicly articulated formal policy, especially as crypto businesses have struggled to secure traditional corporate bank accounts in recent years.

Garner also raised concerns about the implications of this decision in light of the recent ‘de-banking’ controversy, where regulators are examining whether banks can discriminate against businesses without valid risk concerns. It’s important to note that Coinbase’s stock has experienced a significant decline in the past week, with a reported 8.02% drop in its total return. Additionally, Coinbase does not currently offer dividends to its shareholders.