Columbia Business School professor Omid Malekan has raised questions regarding J.P. Morgan's involvement with Bitcoin, highlighting a potential conflict with regulatory standards and the past criticisms of cryptocurrency by the bank's CEO, Jamie Dimon. Malekan expressed his views on January 13 through his X account.
"But Bitcoin is a $2T exception at the world's biggest bank," said Malekan, Adjunct Professor. "Dimon has consistently maintained that it's a fraud or Ponzi or a tool primarily used for crime. J.P. Morgan has for years facilitated client buying and selling of Bitcoin, first through private funds with NYDIG and now via ETFs."
In his post, Malekan pointed out that J.P. Morgan has been facilitating Bitcoin transactions via private funds and exchange-traded funds (ETFs), despite Dimon's previous statements labeling Bitcoin as a "fraud" and a "Ponzi." He questioned why regulators have not investigated this apparent exception, especially when banks are required to avoid activities linked to crime. Malekan also noted the contrast between Bitcoin’s significant presence at J.P. Morgan and the bank's public stance on the cryptocurrency.
J.P. Morgan has introduced in-house Bitcoin funds for its private banking clients, collaborating with NYDIG to offer passive Bitcoin investment options. The bank has also begun facilitating access to Bitcoin through ETFs, thereby expanding its cryptocurrency investment offerings and providing digital asset services to high-net-worth clients, according to CoinDesk.
CoinDesk reported that Binance.US faced considerable challenges after the U.S. Securities and Exchange Commission (SEC) labeled the exchange a "cauldron of fraud" in 2023. Interim CEO Norman Reed told CoinDesk that this accusation was unsupported by evidence in court. Following the lawsuit, Binance.US experienced a loss of thousands of customers, billions of dollars in assets, and laid off 70% of its staff. Reed said that institutions and banks distanced themselves from Binance.US due to the SEC's allegations likening them to FTX.
Operation Chokepoint 2.0 refers to actions by federal banking regulators aimed at isolating the cryptocurrency industry by pressuring banks to sever ties with crypto-related businesses. Documents obtained through Freedom of Information Act (FOIA) requests by Coinbase and Chief Legal Officer Paul Grewal reveal the Federal Deposit Insurance Corporation's (FDIC) role in discouraging banks from engaging with the crypto sector. These records include unredacted letters and supporting documents showing coordinated efforts under the guise of consumer protection and financial stability, as reported by MarketScreener.
According to his website, Omid Malekan is an adjunct professor at Columbia Business School who has been teaching about cryptocurrency since 2019. He is also an author of two books: "The Story of the Blockchain," a beginner’s guide to blockchain technology, and "Re-Architecting Trust," which explores trust evolution in modern systems. Additionally, Malekan consults for companies and delivers talks on traditional systems intersecting with emerging technologies.