JPMorgan Chase, the biggest U.S. bank by assets, is cutting ties with rapper Kanye West. This comes after West shared anti-Semitic conspiracy theories in a series of social media ramblings in recent weeks, and his appearance on FOX’s “Tucker Carlson Tonight,” at times the most watched infotainment/evening news program in the U.S.
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Decentralized financial networks are color-blind, accessible to anyone with capital and a computer. Ye, as the artist and fashionista calls himself, has until Nov. 21 to find a new place to park his fortune. Maybe he’ll choose BTC or some yield-bearing decentralized finance (DeFi) program. There are also plenty of other banks or credit unions that, no doubt, would be thrilled to serve the billionaire.
I’m not going to wade into whether West’s recent antics cross the line – the guy revels in controversy and (quite conceivably) has a mental disorder. Unfortunately it’s impossible to judge whether Chase, the banking part of JPMorgan Chase, was justified in pushing him out – a letter from the bank, seemingly confirmed as real by West after it surfaced on Twitter, gives no formal reason.
But it’s worth saying a few things about “financial censorship.” Far from being a new phenomenon, this latter-day version of redlining seems to be accelerating in the U.S. and around the world. Regulators are even stepping into the realm of cryptocurrency to set boundaries around what protocols should (not can, because you can’t halt a smart contract) be used.
There are legitimate reasons for halting transactions and freezing accounts. As long as it’s not discrimination based on race, sex, gender, religion, or other protected characteristics, businesses that refuse service are just practicing their rights. This is true, in my book, even when presidents get kicked off their favorite microblogging sites – it’s a constitutional and moral matter.
What’s worrying is not the ability for banks to decide which clients they serve, but the arbitrariness with which they can act. The timing here, for West, seems to suggest the reputational risks for JPMorgan are no longer worth the business he brings in – but no one can say for sure.
West has had longstanding issues with JPMorgan Chase. Just last month he complained about not being able to get CEO Jamie Dimon on the phone, and also criticized executives in its wealth management and investment banking divisions. It’s entirely plausible West’s public condemnation of the bank was enough reason to prompt cutting him off, and that the timing of the revelation following the recent social media drama is coincidental.
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The move by the bank parallels recent troubles with Adidas and Gap. It’s also not exactly clear if those longstanding corporate partners for West’s fashion line initiated the breakup or if it was Kanye. You can try reading his Instagram. But no one should be surprised when Corporate America bucks at a little controversy.
“It’s time for me to go it alone,” Ye said in an interview with Bloomberg last month. “It’s fine. I made the companies money. The companies made me money … Now it’s time for Ye to make the new industry. No more companies standing in between me and the audience.”
In one sense West is again ahead of the curve. Putting aside his apparent bigotry, his messages that are borderline incitements of violence, his egomania – West is deciding to go it alone. And likely the world will follow – not West himself, but in carving out their own paths.
This is a trend spurred by the advent of the internet, and supercharged by crypto: Digitization allows anyone to build a business, a brand, a life without intermediaries. Does it matter when banks penalize dissidents? Yes, but it has mattered less and less since bitcoin became an option.