JPMorgan Blocks 2 Venezuelan Stablecoin Accounts Amid Regulatory Heat
JPMorgan has suddenly shut down the bank accounts of two Venezuelan stablecoin startups - BlindPay and Kontigo...
Quick overview
- JPMorgan has shut down the accounts of Venezuelan stablecoin startups BlindPay and Kontigo due to compliance concerns related to high-risk operations in the region.
- The decision was influenced by increased transaction activity and a rise in disputed transactions, which triggered JPMorgan's risk management systems.
- Kontigo's co-founder denied allegations of improper fund transfers, highlighting the scrutiny faced by businesses in sanctioned areas.
- Despite challenges, stablecoins are gaining global traction, with major players like Sony Bank and Western Union planning to launch their own stablecoins in the near future.
JPMorgan has suddenly shut down the bank accounts of two Venezuelan stablecoin startups – BlindPay and Kontigo – citing compliance concerns, but this is most likely due to the notoriously high-risk nature of this region. Both of these startups have the backing of Y Combinator and offer their services to users all over Latin America, but have a special focus on Venezuela.
Sources close to the situation indicate that JPMorgan froze these accounts due to a combination of increased activity from the startups and the nightmare complexity of operating in regions under international sanctions. Spokespeople at JPMorgan deny that this decision has anything to do with stablecoins in general, and instead point out that they bank lots of stablecoin-related businesses and have even taken one stablecoin issuer public recently.
The real story behind the freeze, according to Checkbook’s CEO, PJ Gupta, is that the number of disputed transactions became too high for JPMorgan’s comfort levels after the startups expanded their customer base. “The spike in chargebacks got picked up by JPMorgan’s automatic risk systems, and that’s all there is to it,” Gupta said.
Meanwhile Kontigo co-founder Jesus Castillo was at pains to deny any claims that the company was involved in the transfer of funds from Venezuela without proper id verification. The freeze highlights the increasing scrutiny that any business operating in a sanctioned region faces.
JUST IN: 🇺🇸 JPMorgan freezes accounts of fast-growing stablecoin startups operating in high-risk markets, citing compliance and KYC risks. pic.twitter.com/0ogOLWZblp
— SwanDesk (@SwanDesk) December 27, 2025
Rising Compliance Pressure in Venezuela
This is just the latest example of how Venezuela’s decision to turn to cryptocurrencies to get around international financial restrictions is causing major headaches for the banks and payment providers that deal with them.
- Any business operating in a high-risk region like this has an awful lot of hoops to jump through for compliance.
- Companies like BlindPay and Kontigo, which are rapidly expanding their online customer base, are more likely to get pulled up by regulators.
- The very uncertainty of it all makes complying with international sanctions so tricky.
This is yet another example of a major financial institution being very careful when dealing with digital assets linked to countries under international sanctions.
Stablecoins Gain Momentum Globally
Despite all these hurdles, stablecoins are becoming ever more popular around the globe. The FDIC is currently working on new proposals that will allow U.S. banks to issue regulated, approved stablecoins, which is expected to be good news for crypto platforms.
Globally, there are plenty of other major players who are getting ready for the day when stablecoins become the norm. For example:
- Sony Bank is planning to launch its own U.S. dollar-pegged stablecoin in 2026.
- Western Union wants to get its U.S. Dollar Payment Token online with Anchorage Digital Bank by early 2026.
This all suggests that while operating in a region like Venezuela is going to be fraught with difficulty, regulated stablecoins are becoming more and more mainstream, and are probably going to be a key part of the future of digital finance.
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