JPMorgan Freezes Accounts of Two Stablecoin Startups Over Sanctions Risk Concerns

JPMorgan Chase just slammed the brakes on two stablecoin projects. The banking giant froze their accounts—citing potential sanctions risk as the reason. No warning, no gradual wind-down. Just a classic banking power move.

The Compliance Hammer Drops

For startups building dollar-pegged digital currencies, a major bank account isn't a luxury—it's the lifeblood of operations. Losing it means frozen funds, stranded payroll, and a scramble for alternatives. JPMorgan's risk algorithms flagged something, and that was that. The message to the crypto sector is clear: play by traditional finance's rulebook, or don't play at all.

Navigating the Gray Zone

Stablecoins live in a regulatory gray area. They promise the stability of traditional finance with the innovation of crypto, but that puts them directly in the crosshairs of legacy compliance departments. When a bank the size of JPMorgan gets spooked, it doesn't ask questions first. It severs ties and asks questions later—if ever. A reminder that in finance, sometimes the biggest risk isn't market volatility; it's your banker's cold feet.

This is more than an operational hiccup—it's a stark warning. The old guard still controls the gates, and they're not afraid to lock them. For an industry built on 'debanking' the system, getting debanked by the system is the ultimate irony. Just another day where crypto's biggest innovation meets finance's oldest instinct: cover your own assets first.

In brief

• JPMorgan froze the accounts of BlindPay and Kontigo over connections to Venezuela and other high-risk regions under US sanctions.
• Both startups are backed by Y Combinator and operate mainly across Latin America using JPMorgan through Checkbook.

Stablecoin Startups Hit by Freezes

The affected startups, both backed by Y Combinator and operating mainly across Latin America, used JPMorgan’s banking services through the digital payments firm Checkbook. The freezes were triggered after the bank detected activity tied to Venezuela and other territories restricted under U.S. sanctions, raising concerns within the institution.

JPMorgan has clarified that the decision does not indicate opposition to stablecoins or blockchain-based businesses. A spokesperson noted that the bank continues to serve stablecoin issuers and related ventures, including recently facilitating the public listing of one such issuer. The MOVE was purely compliance-driven, rather than a stance against digital currencies.

Checkbook CEO PJ Gupta added context to the situation, explaining that the accounts of BlindPay and Kontigo were among several affected due to a noticeable increase in chargebacks. Gupta said that rapid onboarding of customers—allowing a high volume of users to open accounts online quickly—contributed to a spike in disputes, which ultimately led the bank to temporarily freeze the accounts.

U.S. Actions Against Venezuela Push Crypto Adoption

The account freezes coincided with President Donald Trump’s ongoing measures targeting Venezuela. Recent actions include the seizure of an oil tanker leaving Venezuelan waters, marking the second interception this month, along with earlier steps such as the 25% tariff on Venezuela’s oil sector imposed in March 2025.

These developments increased financial pressure in the country, leading private buyers to rely more on cryptocurrencies. Following the March tariff, Venezuelan buyers reportedly acquired around $119 million in digital assets, using digital currencies to maintain financial stability amid sanctions and economic challenges.

Stablecoins Take Central Role in Venezuela’s Economy

Cryptocurrencies, particularly stablecoins, are increasingly relied upon in Venezuela, as citizens turn to them to safeguard their wealth from a devaluing national currency and tighter government controls.

Beyond personal use, stablecoins have also become central to the nation’s economy, with nearly 80% of oil revenue processed through USDT, serving as a key tool for managing energy earnings. This growing use shows how digital currencies are becoming an integral part of everyday economic activity in a challenging financial environment.

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