Bitcoin

JPMorgan Continues Handling Bitcoin XBT Despite CEO’s Criticisms

JPMorgan Chase continues to route customer orders for bitcoin-related instruments, despite its CEO calling the cryptocurrency “a fraud” and threatening to fire anyone at the bank who trades it.

A Reuters news article noted that while JPMorgan acts as an agent for buyers and sellers of the bitcoin XBT, it does not take positions in the instrument with its own capital and routes the orders electronically to exchanges.

“They are not JPMorgan orders,” said JPMorgan spokesman Brian Marchiony. “These are clients purchasing third-party products directly.”

Bitcoin, a digital currency that enables individuals to transfer value to each other and pay for goods and services outside of the regulated financial system, is not backed by any government. It has been tied to crimes such as money laundering, hacking and drug trafficking, leading most financial institutions to avoid dealing in it.

“If we have a trader that trades bitcoin, I would fire them in a second, for two reasons: It is against our rules and they are stupid, and both are dangerous,” CEO Jamie Dimon said at an investor conference. “The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”

Bitcoin prices fell last week to nearly $3,000 from $4,200 after Dimon’s remarks, and China reportedly cracked down on cryptocurrency exchanges. It rebounded this week at $4,025 on Monday.

Along with JPMorgan, more than a dozen banks, including Morgan Stanley, Goldman Sachs Group and Credit Suisse Group, have acted as brokers for buying and selling bitcoin XBT on Nasdaq’s Stockholm-based exchange.

In addition, CBOE Holdings has applied with U.S. regulators to handle a bitcoin futures contract and an exchange-traded fund.

“Like it or not, people want exposure to bitcoin,” CBOE CEO Edward Tilly said last week at the same conference where Dimon spoke.

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