Y Combinator–backed firms face banking disruption amid heightened compliance scrutiny
JPMorgan Chase has frozen bank accounts linked to two venture-backed stablecoin startups after detecting exposure to sanctioned and high-risk jurisdictions. The move highlights growing compliance pressure on crypto-related firms operating across emerging markets, particularly where sanctions risks are elevated.
The affected companies, BlindPay and Kontigo, are stablecoin-focused startups backed by Y Combinator and active primarily in Latin America. Both accessed JPMorgan’s banking infrastructure through a third-party digital payments provider. According to details of the matter, the accounts were frozen after internal reviews flagged transactions connected to Venezuela and other sanctioned regions, triggering sanctions-related controls.
A bank representative emphasized that the action was not an anti-stablecoin stance, noting that JPMorgan continues to provide services to stablecoin issuers and related businesses. The freezes were instead attributed to standard risk and compliance procedures.
Chargebacks and Rapid Growth Raised Red Flags
In addition to sanctions exposure, the accounts were reportedly linked to a surge in chargebacks, a common risk indicator for banks. Rapid online customer onboarding was cited as a contributing factor, increasing transaction volume before controls were fully scaled. This combination of fast growth and cross-border activity appears to have intensified scrutiny.
The incident comes as digital assets gain traction in countries facing currency instability, where stablecoins are increasingly used as financial lifelines. At the same time, large banks are balancing crypto innovation with strict regulatory obligations.
Despite the freezes, JPMorgan continues to explore deeper involvement in digital assets, including potential crypto trading and blockchain-based financial products. The situation underscores a key challenge for the industry: aligning rapid fintech expansion with global compliance standards.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.