JP Morgan Ends Banking Relationship with Crypto Firm Over Regulatory Concerns
JP Morgan Chase reportedly ended its banking relationship with Polymarket in October due to regulatory concerns. The US-based megabank worried that prediction market regulations would lead it to cut ties with the crypto-based firm, according to unnamed sources 'familiar with the matter'. While JPMorgan has yet to comment on the news reports, Polymarket maintains a close relationship with the bank, with CEO Shayne Coplan having spoken at three JPMorgan events in the past year.
Polymarket uses the Polygon blockchain protocol and the stablecoin USD Coin to power its trading and deposits. Despite the reported debanking, the firm is reportedly considering an initial public offering (IPO) bid, with JPMorgan potentially underwriting the deal. The valuation of Polymarket has jumped from $9 billion last year to over $20 billion after a recent investment round.
The issue of debanking has become a contentious topic in the financial world, with lawyers warning that banks should be prepared for potential regulatory scrutiny about alleged debanking of cryptocurrency or digital asset clients. The controversy surrounding Polymarket's relationship with JPMorgan comes as the firm continues to battle attorneys general in courtrooms nationwide.