The New Dispute Between TradFi and Encryption Platforms: The Battle for Data Access Rights

The financial sector once again showcases the confrontation between traditional giants and emerging platforms. The protagonists this time are American investment bank behemoth JPMorgan and the well-known cryptocurrency exchange Gemini. Recently, Gemini co-founder Tyler Winklevoss publicly accused JPMorgan of refusing to provide data services, aiming to suppress fintech companies and encryption platforms. This incident reminds industry insiders of the previous impact of "Operation ChokePoint 2.0" on cryptocurrency companies.

Data Access Rights: The New Round of Financial Battleground

In the intersection of TradFi and encryption, user data has always been the focal point of contention for both sides. Complete KYC information can help the platform better assess user risk preferences, asset scale, and security levels, thereby optimizing business processes.

The core of this dispute is the access rights to bank data. Tyler Winklevoss criticized JPMorgan for depriving Gemini of the right to obtain bank data for free through third-party platforms, instead requiring fintech companies to pay high fees. In response, JPMorgan announced that it would suspend plans to readmit Gemini as a client.

This action is reminiscent of the past "Operation ChokePoint 2.0" initiative, once again showcasing the suppression of emerging encryption platforms by traditional financial giants.

"Operation ChokePoint 2.0": A Review of Financial Suppression Actions

In 2023, several encryption-friendly banks went bankrupt one after another, with some opinions suggesting that this may have been influenced by government pressure. Subsequently, "Operation Chokepoint 2.0" gradually came to light.

Multiple tech industry insiders have revealed that in recent years, a large number of bank accounts belonging to founders of tech companies have been closed without cause. This "refusal of service" behavior, while often lacking a clear reason, has serious consequences, ranging from an inability to open bank accounts to facing existential crises.

It is worth noting that this action also laid the groundwork for Trump's approval rating. In March of this year, Trump promised to end the crackdown on the encryption industry at the White House encryption summit, marking a milestone in this "financial persecution."

JPMorgan's Strategy: Monetizing Data While Bypassing Regulations

Another focal point of this dispute is the "Consumer Financial Protection Act". This law requires financial institutions to unlock personal financial data for consumers free of charge upon request and allows it to be transferred to other service providers. However, JPMorgan seems to have found a way to circumvent this regulation: treating data access rights as a tradable commodity.

At the same time, the banking sector is actively seeking to sue the U.S. Consumer Financial Protection Bureau, hoping to abolish the "open banking rule" in order to curb the development of encryption platforms.

New Trends in Banking

Recently, multiple industry organizations, including the American Bankers Association, jointly requested to suspend the review of bank license applications from several well-known encryption companies, on the grounds that these applications lack transparency and may pose legal risks to the banking system.

In this regard, Caitlin Long, founder of the encryption bank Custodia Bank, pointed out that the response of the banking industry is quite intriguing. If they are really concerned about the existing rules being abused, why not directly transform into a trust company to continue operating with lower capital requirements and regulations?

Alexander Grieve, the head of government affairs at the venture capital firm Paradigm, believes that the actions taken by the banking sector indicate that they are finally recognizing the substantial competition coming from the encryption industry.

Conclusion

Regardless of how the data dispute between Gemini and JPMorgan is ultimately resolved, the competition between the banking industry and encryption platforms has become public. As relevant legislation continues to pass, the competition in areas such as cross-border payments, daily transactions, and commercial acceptance between the two sides will intensify. In the future, whether TradFi can continue to dominate the market or if encryption platforms will disrupt the existing landscape, the outcome of this game is worth our continued attention.