based on materials from the site - By Cryptopolitan_News
Tyler Winklevoss stated that JPMorgan is trying to destroy cryptocurrency by charging for access to its banking data. He posted on X accusing the $800 billion bank and other Wall Street players of attacking open banking and third-party applications that make cryptocurrency accessible to millions.
Tyler stated that they are targeting companies like Plaid to sever the link between your fiat account and your crypto wallet; this concerns Gemini, Coinbase, Kraken, and others.
According to Tyler, co-owner of Gemini, JPMorgan and its allies 'want to deprive you of the right to free access to banking data' and replace it with enormous fees that will ruin startups helping people transfer money into cryptocurrency.
These include third-party aggregators, fintech platforms, and any companies operating under the open banking rule as per Section 1033 of the Consumer Financial Protection Act. Tyler warned that JPMorgan is actively suing the Consumer Financial Protection Bureau to overturn the open banking rule and completely close access to data.
Fees could ruin small fintech companies and block cryptocurrency transfers.
Last month, JPMorgan informed fintech companies about plans to charge fees for each access to customer account data. This means that every time someone transfers money from a JPMorgan Chase account to a cryptocurrency exchange like Coinbase or Kraken, the intermediaries providing the technology, such as Plaid or MX, will now have to pay.
They are expected to pass these fees on to their customers. In some cases, the fees could even hit consumers. Another analyst stated that the fees will be higher than the earnings of their fintech company for an entire decade. This will require everyone to raise prices by 1000% to cover costs. Small startups will no longer be able to serve customers using JPMorgan's services.
Arjun Sethi, co-director of Kraken, stated that JPMorgan is taking over customer data management and treating it as a product. 'Once data becomes a source of income, it needs to be fragmented, locked in, and sold at a markup,' Arjun said on X.
Tyler's post received hundreds of responses on X. One user wrote: 'Chase constantly blocks my transfers to Kraken, even when I go into the bank branch.' Another added: 'Big banks are scared that you can actually control your financial data. They prefer to keep you trapped.'
Andy Barr, who stated that cryptocurrency does not concern him, nonetheless acknowledged that it harms fintech. 'Open banking is a basic technology that most countries have already adopted or are implementing,' he said. 'Abandoning its implementation will only push us back further.'
One user claimed that providing Plaid or any third party with your banking data is a bad idea. 'Remember: if it's free, then the product is you,' he wrote.
Jamie Dimon, CEO of JPMorgan Chase, made it clear during a 2021 analyst conference that he does not like fintechs. He told investors that traditional banks should 'fear to death' startups like Plaid and that competition will be fierce over the next decade. He said he expects to win this battle, and since then has been trying to ensure that no one else does.
Jamie wrote in his annual letter to shareholders this year that the fight against third-party aggregators is already gaining momentum. He said that JPMorgan is ready to share data, but only if it is done in a way that they need. Customers, he said, must give their permission for everything.
They must also know exactly how and when their data is used. He argued that companies like Plaid use banking data for profit and insisted that they should be required to pay for using JPMorgan's infrastructure.
During the JPMorgan conference call on financial results, Jamie added that launching APIs and ensuring system security incur real costs. But not everyone believes this logic. Critics argue that this is aimed at suppressing competition rather than protecting customers. Harshita Ravat, an analyst at Bernstein, estimated that JPMorgan has about 20 million checking accounts.
This means that 20 million people may soon lose the ability to use third-party applications with cryptocurrency. The bank has already informed Plaid and other aggregators about upcoming fees. The exact amount is still unknown.
PayPal and Block may not face problems for now. Analysts believe they have already struck deals with JPMorgan that will protect them from these new costs. However, others consider this viewpoint overly optimistic.
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