According to a report from CoinDesk, the crypto exchange Gemini lost its main partner, banking giant JP Morgan. The report cited people familiar with the matter, who failed to provide further details on the decision.
In recent years, as the price of Bitcoin and other cryptocurrencies fell, several companies and projects stepped up and filed for bankruptcy protection. Gemini has seen similar scandals.
Rocky Gemini Moon Causes JP Morgan Breakup?
As Bitcoinist reported, Gemini has been investigated by the US Securities and Exchange Commission (SEC). The crypto exchange is accused of offering unregistered securities through its “Earn Program.”
This investigation and the events surrounding Gemini Earn may have influenced JP Morgan’s decision. However, there has been no official statement from the banking giant or Gemini regarding the report.
Earn Program has been controversial and sits at the heart of the exchange’s latest problems. When Gemini’s critical partner for the program and its subsidiary Digital Currency Group (DCG) Genesis ceased operations, users were unable to withdraw funds from the platform.
The user sends cryptocurrency to the Earning Program to receive the staking rewards and results generated by Genesis. The collapse of FTX led to the latter and bankruptcy proceedings.
As a result of these events, Gemini entered into negotiations with DCG to restructure billions of dollars in debt. In addition, Cameron and Tyler Winklevoss, the founder of the crypto exchange, received lawsuits from users.
The event comes as the crypto market continues to experience a decline in the prices of top cryptocurrencies, including Bitcoin and Ethereum. Regulators around the world are aiming to impose stricter rules on the new sector.
Despite JP Morgan’s decision to cut ties with Gemini, the report claims the relationship with Coinbase will continue. Thus, it is likely that the breakup with the company founded by Winklevoss has something to do with the scandal mentioned above.
If so, will other major partners end their relationship with this crypto exchange? Stay tuned. At this writing, Bitcoin (BTC) is trading at $22,000 as the downturn in the asset exceeds and targets the lower support level.
Cover image from Unsplash, graphics from Tradingview.