According to a report from CoinDesk, crypto exchange Gemini lost a major partner, banking Giant JP Morgan. The report cites a person familiar with the matter, which failed to provide further details about the decision.
In the past years, as the price of Bitcoin and other cryptocurrencies trends to the downside, several companies and projects went belly up and filed for bankruptcy protection. Gemini has seen its fair share of scandals.
Gemini’s Rocky Months Lead To JP Morgan Break Up?
As Bitcoinist reported, Gemini has been scrutinized by the U.S. Securities and Exchange Commission (SEC). The crypto exchange was charged with offering an unregistered security via its defunct “Earn Program.”
This investigation and the events around Gemini Earn might have led to JP Morgan’s decision. However, there is no official statement from the banking giant or Gemini regarding the report.
The Earn Program has been controversial and sits at the heart of the exchange’s latest issues. When Gemini’s critical partner for the program and the Digital Currency Group (DCG) subsidiary Genesis halted operations, users could not withdraw their funds from the platform.
These users send their cryptocurrencies to the Earn Program to receive staking rewards and a yield generated by Genesis. The FTX collapse impacted the latter and its bankruptcy process.
As a result of these events, Gemini entered into negotiations with the DCG to restructure a billion-dollar debt. In addition, Cameron and Tyler Winklevoss, the crypto exchange’s founders, received lawsuits from their users.
These events transpired as the crypto market continued to see a decline in the price of top cryptocurrencies, including Bitcoin and Ethereum. Worldwide regulators aim to impose stricter rules on the nascent sector.
Despite JP Morgan’s decision to cut ties with Gemini, the report claims its relationship with Coinbase will continue. Thus, it is likely that its breakup with the Winklevoss-founded company is related to the scandals mentioned above.
If so, will other major partners end their relationship with this crypto exchange? Remains to be seen. As of this writing, Bitcoin (BTC) trades at $22,000 as the downturn in the asset extends and targets lower support levels.
Update: Gemini denied the report and confirmed that their relationship with JP Morgan will continue, according to a Twitter post.
Despite reporting to the contrary, Gemini’s banking relationship remains intact with JPMorgan.
— Gemini (@Gemini) March 8, 2023
Cover image from Unsplash, chart from Tradingview.