Banking Startup Kontigo Promises Refunds After Stablecoin Hack

Banking startup Kontigo says it will reimburse more than 1,000 customers following a hack.

That hack affected $340,905 worth of these customers’ stablecoins, the company said in an X post flagged by Bloomberg News Monday (Jan. 5).

“We detected unauthorized access that affected funds of some users,” the company said. “Your funds are protected and any affected amounts will be reimbursed by Kontigo.”

The hack follows another piece of bad news for Kotingo. Last month, JPMorgan Chase froze accounts used by the company and fellow stablecoin startup BlindPay because they did business in Venezuela and other jurisdictions under sanctions or other restrictions. Both companies connect to JPMorgan via payments firm Checkbook.

JPMorgan’s actions were reported by The Information, which included comments from a spokesperson for the bank who stressed that the move had nothing to do with the companies’ stablecoin ties.

Checkbook CEO PJ Gupta told The Information that BlindPay and Kontigo were among the firms responsible for a sharp rise in chargebacks that caused JPMorgan Chase to close their accounts. Gupta added that the chargebacks came when the companies “opened the floodgates and a bunch of people came in over the internet.”

Kontigo Co-founder Jesus Castillo said in the report that his company was dealing with issues through Checkbook, and denied claims by a not-for-profit group that Kontigo was helping move money out of Venezuela without identification checks. He added that Kontigo was taking legal action against the organization.

News of Kontigo’s data breach came the same day as reports of a breach that affected users of the cryptocurrency wallet Ledger. The breach happened at Global-e — Ledger’s third-party payments service — and involved unauthorized access to Ledger users’ personal details like names and contact information.

The Bloomberg report contends that the hack at Kontigo counters arguments from stablecoin advocates that the tokens offer a safer alternative to traditional bank accounts. That’s because, at least in the U.S., the Federal Deposit Insurance Corp. safeguards as much as $250,000 per account. But if an unregulated startup without FDIC protection fails, there is no guarantee that clients will be able to recover their money, the report added.

And as covered here Monday, stablecoins may have become more prominent in 2025, but are still “not a panacea.” Consumer adoption is still uneven, especially in developed markets with well-functioning payment systems.

“User experience, custody, and fraud prevention continue to lag behind familiar FinTech apps,” PYMNTS wrote.

“There are also unresolved questions about concentration risk, especially around reserve assets and systemic reliance on a small number of issuers. Even with regulation, the idea of private entities issuing digital dollars at scale remains politically sensitive.”