• Crypto exchange Gemini lost a major partner, banking Giant JP Morgan.
• The decision might have been caused by the controversy surrounding Gemini’s “Earn Program”.
• Despite the breakup with Gemini, JP Morgan’s relationship with Coinbase will continue.
Gemini Loses Major Partner
Crypto exchange Gemini recently saw its major partner, banking giant JP Morgan, part ways with them. While no official statement has been released by either parties, sources familiar with the matter suggest that this decision could be connected to recent scandals surrounding Gemini’s “Earn Program”.
The Controversy of Earn Program
Gemini’s “Earn Program” has been met with much scrutiny from the U.S Securities and Exchange Commission (SEC). They charged the crypto exchange for offering an unregistered security through its program which allowed users to withdraw their funds from platforms in exchange for staking rewards and yield generated by Genesis – a subsidiary of Digital Currency Group (DCG). However, when DCG halted operations due to FTX collapse, users were unable to withdraw their funds as planned which led to a billion-dollar debt restructuring negotiation between Gemini and DCG. Furthermore, this controversy also resulted in legal suits against the Winklevoss twins who are founders of the crypto exchange.
Price Decline in Crypto Market
The crypto market has seen a continuous price decline over past years resulting in bankruptcies and downfall of many companies and projects within it. This includes Bitcoin and Ethereum which are two of top cryptocurrencies currently being traded on exchanges like Gemini. As a result of these events, governments around the world started imposing stricter rules on the industry leading up to JP Morgan’s decision to cut ties with them despite continuing its relationship with Coinbase.
JP Morgan’s Decision
It is not yet clear why JP Morgan decided to break ties with Gemini as no official statement has been released by either party but it is possible that this decision was influenced by all the controversies and scandals that have occurred around Earn Program. The losses incurred due to these issues might have been too great for JP Morgan to ignore prompting them into action thus ending their partnership with the crypto exchange company.
Conclusion
Although there is still no confirmation as to why exactly did JPMorgan decide to end their partnership with gemini, it is likely caused by all the issues surrounding its Earn Program such as lawsuits against Winklevoss twins and debt restructuring negotiations between them and DCG due FTX collapse impacting Genesis’ operations resulting in users not being able withdraw their funds from platform as planned – leading up JPMorgans eventual decision .
