JPMorgan Chase CEO Jamie Dimon reiterated his deep opposition to the cryptocurrency industry and called for a ban in a Senate hearing on Wednesday, saying he would “close it down” if he had the power.
Dimon spoke during the Senate Committee on Banking, Housing and Urban Affairs’ annual oversight meeting of Wall Street firms. Dimon attended the hearing to discuss how the banking industry can serve Americans effectively along with other CEOs from the top banks worldwide, including Morgan Stanley, Goldman Sachs, Bank of America and BNY Mellon.
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In the hearing, Senator Elizabeth Warren (D-MA) shifted the focus away from Basel III, the international agreement implemented after the 2008 financial crisis, toward cryptocurrency. According to her, terrorists now have a new way to circumvent the Bank Secrecy Act to commit illicit acts through cryptocurrency.
“Last year, an estimated $20 billion in illicit crypto transactions funded every kind of dangerous criminal,” Warren said.
“North Korea has funded at least half its missile program, including nuclear weapons, using the proceeds of crypto crime.”
Warren was citing a January 2023 report by data firm Chainalysis, which found that $23 billion worth of cryptocurrency was laundered through illicit activities in 2022. However, the report also found that throughout the first half of 2023, illicit crypto activities had decreased by 65 percent.
Senator Warren’s line of questioning on cryptocurrencies received support from Dimon, a long-time critic of the digital asset space.
“I’ve always been deeply opposed to crypto, bitcoin, et cetera. The only true use case for it is criminals, drug traffickers … money laundering, tax avoidance,” said Dimon in response to Senator Warren. “If I was the government, I’d close it down.”
According to Dimon, cryptocurrencies possess multiple characteristics—semi-anonymous, the capacity for instantaneous money transfers and the ability to bypass essential regulatory safeguards like Anti-Money Laundering (AML) checks, Know Your Customer (KYC) protocols and Office of Foreign Assets Control (OFAC) sanctions. This combination, he argued, creates a haven for illegal transactions and illicit activities.
Yesterday, Jamie Dimon gave marching orders to U.S. officials to shutdown crypto exchanges pic.twitter.com/Wca9q10Pv2
— Financelot (@FinanceLancelot) December 7, 2023
Continuous disapproval of crypto
Dimon’s history of criticizing cryptocurrencies is extensive. In 2017, he threatened to fire any trader who touched Bitcoin. He has repeatedly labeled Bitcoin a “hyped-up fraud” and questioned its legitimacy as an investment, urging investors to “stay away” from it.
These criticisms extend to Bitcoin’s lack of “intrinsic value” and its resemblance to a “decentralized Ponzi scheme.”
Dimon further cast doubt on the crypto asset earlier this year. He did not believe in the authenticity of Bitcoin’s 21 million coin supply cap, a crucial feature of the digital asset.
His criticisms resonate with the skepticism voiced by leading U.S. regulators, particularly the Securities and Exchange Commission (SEC) under Chair Gary Gensler. In the wake of FTX’s collapse in 2022, the SEC has adopted a more aggressive stance towards the crypto industry.
The skepticism is also shared by the European Central Bank (ECB), as it acknowledges its current regulatory framework leaves room for these digital assets to operate without proper oversight.
However, his comments are contradictory to his institution’s movements that continue to dip into the blockchain space. It even launched its blockchain platform, Onyx, in 2020 as the first-ever bank-led project of its kind. In addition, JPMorgan launched its corporate stablecoin, JPM Coin, in 2017, which is still available to select institutional clients.
In May, a research note from the bank predicted Bitcoin, the world’s most prominent cryptocurrency, could reach $45,000 if it mirrored gold’s investment appeal. Bitcoin surged to $44,000 this week as gold hit a record high of $2,140 per ounce.
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