American multinational financial services and banking giant, JPMorgan Chase is reportedly on track to cut its business ties with Gemini Exchange.
According to a CoinDesk report citing anonymous sources close to the matter, the relationship between the duo which was birthed back in the first quarter of 2020 is set to end without any unveiled reason.
Gemini Exchange was floated by the popular crypto twins, Cameron and Tyler Winklevoss and it has grown to become a formidable trading outfit in the emerging crypto trading ecosystem. The exchange is one of those regulated by the New York State Department of Financial Services (NYDFS).
Over the years, the exchange has broadened its operational reach and expanded its service offerings. The exchange boasts of high security and liquidity, and its banking partnership with JPMorgan Chase & Co (NYSE: JPM) notably helped lend credence to its products and services. With the banking relationship reportedly set to end, it remains unclear how this will shape the future of Gemini moving forward.
Per the report, should JPMorgan cut ties with Gemini, the exchange may not be left stranded or without a banking partner. According to details shared on its website, Gemini also banks with State Street Corp (NYSE: STT), and the Boston-based bank may be able to serve its needs in the foreseeable future.
When JPMorgan took on Gemini at the time, it also onboarded a publicly traded outfit, Coinbase Global Inc (NASDAQ: COIN). However, a Coinbase spokesperson has confirmed that the trading platform’s banking relationship with JPMorgan is still very intact. Also, Gemini exchange made an attempt to allay all fears about the banking relationship with the financial services titan following the publication of the Coindesk report.
“Despite reporting to the contrary, Gemini’s banking relationship remains intact with JPMorgan,” the firm said in a tweet.
Gemini and Crypto Winter Struggles
When the crypto winter was at its earliest stages, Gemini tried its best to respond by instituting a number of staff layoffs as best as it could. While this helped it manage its operational costs at the time, it soon fell victim to the meltdown that trickled down from the bankruptcy of Three Arrows Capital (3AC) and then Genesis Trading.
Genesis, a subsidiary of the Digital Currency Group (DCG), is owing Gemini Exchange the sum of $900 million owed to the trading platform’s Earn customers. The liquidity crisis Gemini was plunged into has caused a lot of brawls between the leaders of the two companies who called themselves out on Twitter.
Gemini has effectively wound down its Earn program and the uncertainty on the directions of this crypto winter can be tagged as one of the major reasons why JPMorgan may be looking at pulling the plugs on its relationship with the trading outfit.