by Vincent Muthee
JPMorgan Chase has frozen bank accounts associated with two venture-backed stablecoin startups after identifying sanctions-related risks linked to their operations. The action adds pressure on crypto payment firms operating in high-risk jurisdictions, even as large banks continue to expand their digital asset services.
BlindPay and Kontigo, both backed by Y Combinator, lost access to accounts connected to JPMorgan’s banking infrastructure after the bank flagged exposure to sanctioned regions.
Sanctions Exposure Triggers JPMorgan Account Freezes
According to a recent report, JPMorgan blocked accounts related to BlindPay and Kontigo after discovering business exposure to Venezuela and other sanctioned jurisdictions.
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
Both firms provide stablecoin-based payment services focused on Latin American markets. They both accessed JPMorgan’s services through Checkbook, a US-based digital payments provider that partners with major banks.
A JPMorgan spokesperson, however, said the move does not reflect opposition to stablecoins. JPMorgan stated that it continues to serve stablecoin issuers and related businesses. The spokesperson also pointed to the bank’s recent role in taking a stablecoin issuer public as evidence of its broader digital asset involvement.
“This has nothing to do with stablecoin companies…We bank both stablecoin issuers and stablecoin-related businesses, and we recently took a stablecoin issuer public,” the spokesperson told The Information.
Venezuela remains a sensitive jurisdiction for US financial institutions. Citizens increasingly rely on cryptocurrencies and dollar-pegged stablecoins to protect savings from inflation, currency controls, and economic instability. That usage has driven growth for crypto payment platforms, while increasing regulatory scrutiny for banks that touch those flows.
Chargebacks and Rapid Growth Raise Compliance Risk
Checkbook CEO PJ Gupta told The Information that BlindPay and Kontigo formed part of a wider group linked to a spike in chargebacks. The surge led JPMorgan to shut down several accounts, according to Gupta.
He attributed the issue to aggressive customer onboarding. Gupta said the companies opened access rapidly, allowing large volumes of users to join through online channels.
“They opened the floodgates and a bunch of people came in over the internet,” Gupta remarked.
Chargebacks remain a critical red flag for banks, especially when tied to cross-border payments and emerging markets. The US sanctions laws and anti-money laundering regulations impose stringent requirements on financial institutions. Breaking the rules may lead to hefty fines and disciplinary measures.
The freezes come as JPMorgan and Checkbook strengthen their commercial relationship. In November 2024, Checkbook joined the J.P. Morgan Payments Partner Network. The partnership allows corporate clients to send digital checks using JPMorgan’s payments infrastructure.
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