Stablecoin Startups Face Banking Pressure Over High-Risk Jurisdictions

Source: Coindoo Original Title: Stablecoin Startups Face Banking Pressure Over High-Risk Jurisdictions Original Link: https://coindoo.com/stablecoin-startups-face-banking-pressure-over-high-risk-jurisdictions/ Two early-stage stablecoin firms backed by Y Combinator have reportedly lost access to key banking services after JPMorgan Chase flagged potential compliance risks tied to their operations.

The move highlights the growing friction between traditional banks and crypto-linked payment companies operating in regions subject to heightened regulatory scrutiny.

Key takeaways

• JPMorgan reportedly froze accounts linked to two stablecoin startups
• The companies are backed by Y Combinator and operate mainly in Latin America
• The action followed exposure to sanctioned or high-risk jurisdictions
• JPMorgan said the move was compliance-driven, not anti-stablecoin
• The case underscores ongoing banking challenges for crypto firms

Sanctions exposure and compliance concerns

JPMorgan froze accounts connected to BlindPay and Kontigo after identifying business exposure linked to sanctioned and high-risk jurisdictions, including Venezuela. Both startups relied on banking access provided indirectly through Checkbook, which partners with major financial institutions to offer payment services.

JPMorgan reportedly stressed that the action was not a rejection of stablecoins as a business category. A bank spokesperson said JPMorgan continues to serve stablecoin issuers and related firms, citing its recent role in taking a stablecoin company public as evidence that the sector itself is not being excluded from its banking operations.

Chargebacks and operational risk add pressure

Behind the account freezes appears to be a broader operational issue tied to transaction risk. Checkbook’s chief executive, PJ Gupta, said BlindPay and Kontigo were among several firms associated with a surge in chargebacks. According to Gupta, rapid online customer onboarding led to a sharp increase in disputed transactions, triggering JPMorgan’s internal risk controls and account shutdowns.

The timing is notable, as JPMorgan and Checkbook have been expanding their partnership. In late 2024, Checkbook joined the J.P. Morgan Payments Partner Network, allowing corporate clients to issue digital checks. The company has also been scaling its business-to-business payment services across regulated sectors such as government, legal services, and banking.

The episode highlights the narrow path crypto-focused startups must navigate when operating in emerging markets where demand for stablecoins is strong but regulatory exposure is high. In countries like Venezuela, digital assets have become a practical alternative amid currency instability and capital controls, yet those same conditions increase compliance sensitivity for US-based banks.

More broadly, the situation reflects a recurring tension in the crypto-finance relationship. While JPMorgan continues to explore deeper involvement in digital assets — including potential crypto trading services for institutional clients — sanctions compliance, chargeback risk, and payment integrity remain firm limits. For startups, access to traditional banking infrastructure increasingly depends not only on innovation, but on operational discipline and jurisdictional exposure.