Compass Mining Says Chase Shut Down Bank Accounts Without Warning

The accounts held about 7% of the company's cash.

Aug 19, 2021 at 9:49 p.m. UTC
Updated Sep 14, 2021 at 1:42 p.m. UTC

Bitcoin mining firm Compass Mining’s bank accounts with Chase Bank, the retail banking arm of JPMorgan Chase, were terminated without warning earlier this week, according to Compass CEO Whit Gibbs. 

Gibbs took to Twitter on Wednesday to announce the shutdown, writing: “Shoutout to Chase for shutting down Compass Mining accounts for doing our part to replace the old guard with self-sovereign, future-focused supporters of hard money.”

According to Gibbs, Compass Mining learned about the account closures when Jameson Nunney, its chief operations officer, visited a local branch in Ohio to make a transaction and was told by an employee that the company’s accounts had been frozen the day before and that Chase would be holding the money until Aug. 27. The accounts held about 7% of the company’s cash. 

This is not the first time Chase has closed accounts belonging to crypto-related companies or to individuals making crypto transactions. Yet Chase has also expanded its crypto banking services, and it took on crypto exchanges Coinbase and Gemini as customers last year. And earlier this year, Chase began allowing its retail wealth management clients access to crypto funds. 

But the closure of Compass Mining’s account signals that Chase may not have completely changed its skeptical view about crypto. At the time of publication, a Chase spokesperson was looking into the matter and had not yet provided comment.

Gibbs told CoinDesk that although Compass Mining was told that its account with Chase was undergoing a review about 90 days ago, it was not given warning about the closure. 

Compass Mining believed that the review was to determine whether its account was eligible for an upgrade. Gibbs said Compass Mining's Chase relationship manager told executives they had nothing to worry about.

But Gibbs said the relationship manager then cut off communications. The accounts were closed without Compass Mining receiving a letter or an email to inform it of the move, much less an explanation.

After Gibbs tweeted about the closure, he was flooded with messages of support and offers to provide services from a number of banks.

“The response from the community was fantastic,” Gibbs told CoinDesk.

Gibbs said that Compass Mining was able to get the funds from the frozen accounts and has moved all of its business to the crypto-friendly bank Signature

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