JPMorgan pressured First National Bank to close the accounts of cryptocurrency exchanges in South Africa, according to two separate sources claiming to have knowledge of the situation. FNB has strongly denied that external pressure forced its hand.

TechCentral has been told that JPMorgan wrote a letter to Alan Pullinger, CEO of FNB parent FirstRand, in which it allegedly asked the banking group to stop doing business with cryptocurrency-related companies. A JPMorgan spokesman in Europe did not respond to an e-mailed request for comment. A local representative for the bank could not immediately be reached on Friday afternoon.

FNB said on Wednesday that it had given notice to cryptocurrency trading platforms that it would shut their bank accounts.

Those who received notices included Luno and VALR.com, among others, though FNB said it couldn’t provide information on specific bank accounts.

“FNB can confirm that it has given reasonable notice to terminate its banking services to virtual currency exchanges and intermediaries trading in virtual currency,” it said.

JPMorgan and FNB are what are known as “correspondent banks” in industry parlance. This means FNB works with JPMorgan to settle foreign exchange transactions from its customers.

TechCentral asked FNB to confirm whether JPMorgan wrote to Pullinger to apply pressure on FirstRand and whether FirstRand (and by extension, FNB) buckled to a request so as not to risk its relationship with the US-headquartered bank.

‘No link’

In response, FNB said: “We categorically confirm that there is no link between the bank’s decision to close virtual currency exchanges to any external entity.”

It added: “We further confirm and emphasise that this decision did not involve any consultation with any third party. As previously communicated, FNB considers this to be a prudent course of action following a comprehensive review of the potential risks currently associated with these entities, particularly given that appropriate regulatory frameworks are not yet in place.”

It said that it periodically “reviews its risk appetite and takes decisions deemed appropriate”.

In 2017, JPMorgan CEO Jamie Dimon labelled bitcoin a “fraud” and said he’d fire any employee of the bank trading in cryptocurrencies. It has also blacklisted cryptocurrency start-ups and refused to open accounts for them, according to various media reports. JPMorgan and Bank of America also pulled the plug the accounts of one of the oldest crypto exchanges, Kraken.