Two Stablecoin Startups Face Account Freezes by JPMorgan Over Sanctions Risk

JPMorgan Chase has frozen the bank accounts of two stablecoin startups, BlindPay and Kontigo, after the bank identified potential links to high-risk regions. The review specifically flagged connections to Venezuela, which is subject to strict U.S. sanctions, prompting the bank to take action.

Stablecoin Startups Hit by Freezes

The affected startups, both backed by Y Combinator and operating mainly across Latin America, used JPMorgan’s banking services through the digital payments firm Checkbook. The freezes were triggered after the bank detected activity tied to Venezuela and other territories restricted under U.S. sanctions, raising concerns within the institution.

JPMorgan has clarified that the decision does not indicate opposition to stablecoins or blockchain-based businesses. A spokesperson noted that the bank continues to serve stablecoin issuers and related ventures, including recently facilitating the public listing of one such issuer. The move was purely compliance-driven, rather than a stance against digital currencies.

Checkbook CEO PJ Gupta added context to the situation, explaining that the accounts of BlindPay and Kontigo were among several affected due to a noticeable increase in chargebacks. Gupta said that rapid onboarding of customers—allowing a high volume of users to open accounts online quickly—contributed to a spike in disputes, which ultimately led the bank to temporarily freeze the accounts.

U.S. Actions Against Venezuela Push Crypto Adoption

The account freezes coincided with President Donald Trump’s ongoing measures targeting Venezuela. Recent actions include the seizure of an oil tanker leaving Venezuelan waters, marking the second interception this month, along with earlier steps such as the 25% tariff on Venezuela’s oil sector imposed in March 2025.

These developments increased financial pressure in the country, leading private buyers to rely more on cryptocurrencies. Following the March tariff, Venezuelan buyers reportedly acquired around $119 million in digital assets, using digital currencies to maintain financial stability amid sanctions and economic challenges.

Stablecoins Take Central Role in Venezuela’s Economy

Cryptocurrencies, particularly stablecoins, are increasingly relied upon in Venezuela, as citizens turn to them to safeguard their wealth from a devaluing national currency and tighter government controls.

Beyond personal use, stablecoins have also become central to the nation’s economy, with nearly 80% of oil revenue processed through USDT, serving as a key tool for managing energy earnings. This growing use shows how digital currencies are becoming an integral part of everyday economic activity in a challenging financial environment.