The Real Reason Bankers Are Afraid of Bitcoin & Cryptocurrency

A former high-flying JPMorgan trader turned cryptocurrency fund manager says banks “have absolutely failed to innovate in any way, shape, or form and now they’re paying the price” in the cryptocurrency market.

Daniel Masters ran JPMorgan’s energy trading business in the 1990s and now oversees cryptocurrency investment at the firm Global Advisors. In an interview with Business Insider, he called cryptocurrency a “true revolution” that traditional financial institutions are dismissing as a “criminal enterprise, Ponzi scheme, and a scam.”


In the interview, Masters said:

The analogue financial services companies are not in this game at all. They don’t want to touch the core currency, which is Bitcoin or ethereum, they’re suspicious about the industry itself. A lot of people think it’s a criminal enterprise and a Ponzi scheme and a scam.

“Cryptocurrency is a ponzi scheme and natural disaster” says Agustin Carsens (Pictured above)


An article in Rolling Stone  summed up the 2008 Financial crisis nicely:

Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.

“Everything’s fucked up, and nobody goes to jail,” he said. “That’s your whole story right there. Hell, you don’t even have to write the rest of it. Just write that.”

I put down my notebook. “Just that?”

“That’s right,” he said, signaling to the waitress for the check. “Everything’s fucked up, and nobody goes to jail. You can end the piece right there.”

Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth — and nobody went to jail.

The fact that these Bankers try to portray that they care about the people is comical.

The only reason they are concerned with Bitcoin and calling it a scam is because it is a threat to their business.  


Why are banks and governments scared of Bitcoin?

Bitcoin – and other decentralised cryptocurrencies – allow people to trade directly with each other, cutting out the need for a middleman which, in traditional commerce, is a bank.

Banks generally charge fees for doing anything with money, even just holding on to it. That’s because the banks have created a level of trust that transactions pass smoothly and everything is recorded and accounted for correctly.

But as the financial crisis of 2008 proved, banks are not above abusing trust to line their own pockets.

That’s what led to the development of cryptocurrencies like Bitcoin in 2009

The key to its success is something called the blockchain. The blockchain is a means of solving the double-spending problem: which is that because the currency is digital it is open to being copied and spent more than once – something banks stop with physical currency.

However, the blockchain acts as a digital ledger, whereby every single transaction (called a block) is securely linked together using cryptography and encryption. It’s verifiable, available to everyone who owns Bitcoin and is immune to fraud and hacking – unlike centralised banks.

It enables one digital wallet (that can be stored on a phone) to directly connect with another securely and process a transaction.

As such, it removes the need for any kind of traditional bank or regulator.

Read: Banks spread fake news stories about Bitcoin and other cryptocurrencies to ‘restore the status quo’

Unsurprisingly, banks aren’t happy about being made obsolete and – with help from governments – are trying to clamp down on cryptocurrencies after initially dismissing them out of hand.


Big Banks want to destroy Bitcoin before it destroys them

Banks underlying fear of bitcoin boils down to this irrefutable truth: They fear they can be replaced.  Bitcoin can potentially make central banks obsolete

Bitcoin, the “people’s currency,” has the potential to become a new currency, free of the control of big governments and big banks. Full article in Forbes 


Of course, for bitcoiners, such dismissiveness by bankers reached its nadir with JP Morgan Chase’s Jamie Dimon’s widely published remarks.

“If you’re stupid enough to buy [bitcoin], you’ll pay the price for it one day,” he said. Mr. Dimon also referred to it as “a fraud,” a concern echoed throughout legacy banking, money laundering being a chief concern.

JP Morgan calls Bitcoin fraud, then buys the shit out of it.

A Brief Summary Of Our “Trustworthy Banks”

… And Why Their Concern Over “Risks It Poses Consumers” Is Utter Horseshit

See: The Big Banks Are Corrupt — and Getting Worse

The Justice Department’s latest settlement with felonious big banks was announced this week, but the repercussions were limited to a few headlines and some scattered protestations.

That’s not enough. We need to understand that our financial system is not merely corrupt in practice. It is corrupt by design – and the problem is growing.

Let’s connect the dots, using news items from the past few weeks:

The latest sweetheart deal

Four of the world’s biggest banks pleaded guilty to felony charges this week, agreeing to pay roughly $5.6 billion in fines for fixing the price of currencies on the foreign exchange market.

Four of the world’s biggest banks.. All four banks of these banks are repeat offenders with long records of serial fraud, as even this outdated graphic shows.


A fifth bank, UBS, was forced to give up a deferred prosecution deal as a result of its involvement in currency exchange fraud. In “deferred prosecution” agreements the Justice Department agrees not to prosecute a bank for crimes it has committed, if it keeps a promise not to commit those crimes again. It was not clear whether this would lead to any real-world consequences for the bank, however.

In yet another related story, Bank of New York Mellon Corporation agreed to pay $180 million to settle a foreign exchange-related class-action lawsuit. This followed a $714 million settlement for writing pension funds and other institutional clients by overcharging them for currency transactions.


J.P. Morgan Chase – again

This one seemed to slip through under the public’s radar. In a development that will trigger severe déjà vu for anyone who’s been following the big banks’ foreclosure scandals, the serially criminal J.P. Morgan Chase agreed on March 3 to pay more than $50 million over “robo-signed” documents – that is, documents which the bank fraudulently submitted to courts in mortgage-related hearings.

From the Wall Street Journal:

“ … Bank officials admitted to filing more than 50,000 payment-change notices that were improperly signed, under penalty of perjury, by persons who hadn’t reviewed the accuracy of the notices, according to Justice Department officials.”

Telling a court you’ve reviewed a document when you haven’t? That’s perjury.

The Journal also noted that the Justice Department found that “more than 25,000 notices were signed in the names of former employees or of employees who had nothing to do with reviewing the accuracy of the filings.”

Again: perjury.

Many people lost their homes unjustly as a result of this mass-produced fraud. The practice was so widespread at J.P. Morgan Chase that it required the hiring of untrained college-aged temps – referred to within the organization as “Burger King kids“ – to generate all the fraudulent paperwork.

This is where we’re obliged to insert a sentence that has long been superfluous when reporting on deals of this kind:

The Justice Department did not announce the indictment of any individual bankers for the crimes which led to this settlement.


Corrupt, and getting worse

Bankers are becoming even more unethical – and banks are making it harder to report ethical lapses to the authorities. The percentage of bankers who believed their own colleagues had engaged in illegal or unethical behavior has nearly doubled since 2012. And more than one-third of those earning $500,000 or more annually said they had first hand knowledge of wrongdoing in the workplace.

The Labaton Sucharow study illustrates something important: Crooked bankers aren’t born. They’re made.

According to the report, “Nearly one-third of respondents (32%) believe compensation structures or bonus plans in place at their company could incentivize employees to compromise ethics or violate the law. “

In fact, bankers’ bonuses do incentivize unethical and criminal behavior – and anything else it takes to generate profits. “Clawbacks” for ill-gotten gains are still few and far between. Remarkably few bankers have been fired for the widespread fraud that continues to characterize their industry. Prosecution for criminal behavior is extremely rare.

A system which rewards antisocial behavior begets social tragedy. It’s also a law enforcement nightmare. Criminology teaches that the presence of reward for criminal behavior, along with the absence of deterrence, almost inevitably leads to more crime.


JPMorgan Chase itself (not merely Bear Stearns or Washington Mutual, two banks that it bought at the height of the crisis) knowingly packaged shoddy mortgages into securities that did not meet its credit standards and then sold them off to investors.

A JPMorgan Chase banker turned whistle-blower, who’d told the team about what was going on. She had also detailed how, before the crash, her warnings about continuing to package up the bad mortgages into securities and sell them off as investments had gone unheeded by her superiors.

In November 2013, as part of a deal that kept Wagner’s complaint from becoming public—and the specifics of Fleischmann’s revelations from being widely disseminated—JPMorgan Chase agreed to a $13 billion settlement with various federal and state agencies, then the largest of its kind.

Instead of presenting a detailed picture of JPMorgan Chase’s misdeeds—as would have happened had Wagner’s complaint been filed and the matter adjudicated in court—the government and the bank negotiated an anodyne 11‑page “Statement of Facts” that glossed over many of the details of the behavior Fleischmann was trying to stop, and did not name any JPMorgan Chase bankers.

The Justice Department reached agreements with other Wall Street banks, among them Citigroup and Bank of America, using a similar playbook: Threaten public disclosure of behavior that looks criminal and then, in exchange for keeping it sealed, extract a huge financial settlement. No one individual, or group of individuals, is held accountable. No predawn raids of Park Avenue apartments are made. No one gets arrested. No one gets publicly shamed.


Wells Fargo 2016 scandal over assertions that bank employees opened accounts without customers’ authorization.

Here’s a timeline of key events since the allegations came to light:

Sept. 8, 2016

The alleged misconduct was revealed when the Consumer Financial Protection Bureau(CFPB), the Los Angeles City Attorney and the Office of the Comptroller of the Currency (OCC) fined the bank $185 million, alleging that more than 2 million bank accounts or credit cards were opened or applied for without customers’ knowledge or permission between May 2011 and July 2015.

Sept. 26, 2016

Two former Wells Fargo employees filed a lawsuit against the bank related to the accounts scandal. The plaintiffs are seeking class-action status for the lawsuit.

The suit, filed on Sept. 22 in California Superior Court by former employees Alexander Polonsky and Brian Zaghi, seeks to represent employees or former employees who worked for the bank during the last 10 years and who, the suit alleges, were “either demoted, forced to resign, or terminated,” for not meeting “impossible” quotas the bank set as goals for employees to open accounts on behalf of customers.

Ok we think you got the point.

And these are the Institutions trying to tell us as consumers “what is safe for us”


Masters’ remarks follow a slew of negative comments on Bitcoin by financial brass just over the course of this month.

okp66FDEuropean Central Bank executive board member Yves Mersch said Bitcoin is “not money” and like “Mr. Ponzi’s schemes” at the Official Monetary and Financial Institutions Forum in London. The general manager for the Bank of Settlements, Augustin Carstens, said Bitcoin is a “combination of a bubble, a Ponzi scheme and an environmental disaster” at a lecture at Frankfurt University. And World Bank president Jim Yong Kim also said Bitcoin was a Ponzi scheme at an event in Washington, Bloombergreports.

Charlie Munger, the 94-year-old vice chairman of Berkshire Hathaway, has even called Bitcoin a “noxious poison” the government needs to regulate during a shareholder meeting earlier this month for the Daily Journal, a publishing firm where he serves as chairman and director, Business Insider reports.

JP Morgan CEO Jamie Dimon faced backlash for calling Bitcoin “a fraud,” which he has since apologized for. The remark triggered a market abuse lawsuit by algorithmic blockchain liquidity provider Blockswater for alleged violation of Article 12 of the European Union’s Market Abuse Regulation.


But some financial institutions appear to be warming up to cryptocurrencies following Bitcoin’s 1,500 percent rise in value against the US dollar last year. The CBOE stock exchange started the world’s first Bitcoin futures trading in December, which crashed its website due to heavy traffic. Goldman Sachs has also suggested they would open desks for trading cryptocurrency during an earnings call last month.

Masters’ firm, Global Advisors, owns a 75 percent stake in Coinshares, which announced in January that the two funds now have more than $1 billion in cryptocurrency assets under management. Masters said this growth is a sign that banks need to take digital currencies seriously.

“The clock has lapsed, it is no longer acceptable to dismiss it,” Masters said.


Startups focused on products and services based on bitcoin have never had an easy time opening bank accounts – or maintaining positive relationships with those firms.

The problem? Bitcoin-related clients are frequently viewed as high-risk by banking institutions, and thus far few banks have shown an interest in going through the process of mitigating that risk.

This is a long-standing issue that has sparked controversy in the past, but given the broader issue of de-risking by banks worldwide, it’s perhaps unsurprising that bitcoin startups would find themselves in the crosshairs of bank compliance departments.

Yet those risks haven’t kept every bank from opening its doors to bitcoin startups. Silvergate Bank, based in La Jolla, California, was one of the earliest institutions to buck that trend.

Silvergate is on the verge of opening its sixteenth bitcoin bank account, and its chief executive officer, Alan Lane, says the benefits of his bank’s early adopter status might be in jeopardy.

Lane told CoinDesk:

“If other banks are shying away from this, it probably wouldn’t be that difficult to generate business if they could create a compliance process that worked.”

The process of developing this kind of more inclusive compliance process – and as a result helping to ease concerns over the perceived risk of bitcoin businesses – began in 2013, according to Lane, who previously oversaw Silvergate’s manufacturing and retail accounts, ranging in size from $10m to $50m in annual revenue.

See: Silvergate’s CEO is Banking 15 Bitcoin Companies

Get Access To Top Performing Venture Capital & Funds Focused On Early- Stage Blockchain Technology Investing

New/Upcoming Ethereum Game Releases to Watch

World Of Ether


Looking For Cryptocurrency Project/Token/ICO/Gambling Site or Company Promotion?

We are the best in the business! Learn more here

If This Article Was Beneficial In Any Way feel free to Subscribe to Our Blog! (It’s Free)

If you are looking for an exchange to join, we would certainly appreciate it if you used our referral links to join.

Happy Trading! If you’re just here to learn that’s great too!

To register for Binance use the link below. Our referral links are there and we’d appreciate it if you used them!


If Binance Is Still Closed to New Member Registration, You Can Get Access and Register Now Here


Invitation link

Invitation code: 28uxs


The information provided on this website does not constitute investment advice, financial advice, trading advice or any other sort of advice and you should not treat any of the website’s content as such. CryptoCurrencyClarified does not recommend that any cryptocurrency should be bought, sold or held by you and nothing on this website should be taken as an offer to buy, sell or hold a cryptocurrency. Do conduct your own due diligence and consult your financial advisory before making any investment decision.

Accuracy of Information

CryptoCurrency Clarified will strive to ensure accuracy of information listed on this website although it will not hold any responsibility for any missing or wrong information. You understand that you are using any and all information available here AT YOUR OWN RISK.

Price Risk

The price of Bitcoin and other cryptocurrencies are highly volatile. It is common for prices to increase or decrease by over 20–100% in some coins in a single day. Although this could mean potential huge profits, this also could mean potential huge losses. DO NOT INVEST ALL YOUR MONEY IN CRYPTOCURRENCIES. Only invest money which you are willing to lose.

Cryptocurrency trading may not be suitable for all users of this website. Anyone looking to invest in cryptocurrencies should consult a fully qualified independent professional financial advisor.


Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: