Are cryptocurrencies for criminals? JP Morgan fined $39B and has its own token
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JPMorgan Chase CEO Jamie Dimon is getting heat after claiming on CryptoX (Twitter) that the “only real use” of Bitcoin (BTC) and cryptocurrencies is to facilitate crime.
On December 5, Dimon said at a U.S. Banking Committee hearing: "The only real use for it is criminals, drug dealers, money laundering, tax avoidance. If I were the government, I would shut it down."
But cryptocurrency experts were quick to point out the seeming hypocrisy in Dimon’s statement, highlighting that JPMorgan Chase is the second-largest bank to be fined, having paid out in 272 breaches since 2000, according to Good Jobs First’s breach tracking system fined US$39.3 billion.
About $38 billion of those fines are the responsibility of Dimon, who became CEO in 2005.
“Call him a fucking hypocrite!” cryptocurrency lawyer John Deaton said in a Dec. 6 X post.
“Jamie Dimon is not in a position to criticize Bitcoin with this record,” said VanEck strategic advisor Gabor Gurbacs, noting that global banks have paid $380 billion in fines this century.
The bank led by Dimon agreed in September to a $75 million settlement with the U.S. Virgin Islands over accusations it facilitated Jeffrey Epstein's sex trafficking operation from 2002 to 2005 and obtain economic benefits from it. It is important to note that the settlement agreement does not constitute an admission of guilt.
Ten years ago, the bank paid the largest fine in its corporate history, $13 billion, in October 2013 for fraudulently misleading investors in "toxic" mortgage deals. Toxic investments are investments that have fallen significantly in value, causing the market to collapse.
Several JPMorgan traders were also investigated for manipulating various metals futures markets between 2008 and 2016 and agreed to pay nearly $1 billion in September 2020 to settle the probe.
JPMorgan was also at the center of the largest cocaine seizure in U.S. history, with 20 tons or 18,140 kilograms of cocaine valued at $1.3 billion seized in July 2019 from a ship allegedly owned by a fund run by JPMorgan.
Dimon says he will shut down cryptocurrencies, but JPMorgan has its own coin
“If I were the government, I would shut it down,” the JPMorgan CEO said in a closing statement to U.S. Senator Elizabeth Wallet during the hearing, in which he mentioned Bitcoin and cryptocurrencies.
However, despite their “strong opposition” to the digital asset space, Dimon and JPMorgan recently launched their own crypto token, JPM Coin, for their institutional client base on a private version of the Ethereum blockchain.
The bank also launched a blockchain-based tokenization platform in October, with BlackRock among its clients. It also provided $65 million in funding to Ethereum infrastructure company Consensys in April 2021.
However, it can be speculated that Dimon is distinguishing between cryptocurrencies that have centralized power behind them and those that do not, as he has called decentralized currencies Ponzi schemes in the past.
Bankless also criticized Dimon’s remarks, explaining that the U.S. government cannot impose an effective ban on Bitcoin or the cryptocurrency industry due to its decentralized nature.
Dimon's comments prompted Community Notes to fact-check X, noting that less than 1% of cryptocurrency transactions are illegal.
