NEW YORK (Reuters) - JPMorgan Chase & Co (JPM.N) has been routing customer orders for bitcoin-related instruments, a spokesman said on Monday, despite the bank’s chief executive’s calling the crypto currency “a fraud.”
Like other Wall Street banks, JPMorgan acts as an agent for buyers and sellers of Bitcoin XBT, an exchange-traded note designed to track the value of the crypto currency.
JPMorgan does not take positions in the instrument with its own capital and routes the orders electronically to exchanges, JPMorgan spokesman Brian Marchiony said.
“They are not JPMorgan orders,” Marchiony said. “These are clients purchasing third-party products directly.”
JPMorgan’s relationship with Bitcoin XBT came into question over the weekend when the financial blog Zerohedge asked why the bank was involved with the trading after Chief Executive Jamie Dimon called bitcoin a fraud and said he would fire anyone at the bank who trades it.
Bitcoin is a digital currency that enables individuals to transfer value to each other and pay for goods and services outside of the regulated financial system.
Because it is not backed by any government and has been tied to crimes, including money laundering, hacking and drug trafficking, most financial institutions have stayed away from dealing in bitcoin.
Dimon captured that sentiment in his comments last week. “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,” he said at an investor conference.
Even so, major financial firms including JPMorgan have invested in a technology called blockchain that underpins bitcoin transactions in hopes that it can be used for other p...