Jamie Dimon is being accused of market abuse in Sweden for badmouthing bitcoin

If JPMorgan traders were caught trading bitcoin, they would be fired “in a second” for their “stupidity,” Dimon said.
If JPMorgan traders were caught trading bitcoin, they would be fired “in a second” for their “stupidity,” Dimon said.
Image: Reuters/Mike Blake
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Remember when Jamie Dimon called bitcoin “a fraud” a week ago? Well, it turns out that the JPMorgan chief executive could have been flouting European market abuse laws by shooting his mouth off. At least, that’s what one complaint to the Swedish financial regulator alleges.

The complaint was lodged by Florian Schweitzer, the managing partner of a London firm called Blockswater, a bitcoin market-maker that trades about $25 million a month. At issue is an alleged link between Dimon’s comments and, a few days later, JPMorgan emerging as one of the most active buyers of a bitcoin tracker fund called Bitcoin XBT. Bitcoin XBT is an exchange-traded note that’s listed on Nasdaq Nordic in Stockholm. It effectively lets clients hold bitcoin without worrying about how to store it securely.

The price of bitcoin fell as much as 24% between the day Dimon verbally thrashed it and the day of the XBT trades. Widely followed finance blog Zero Hedge seized on this and accused JP Morgan of either buying bitcoin on the cheap for itself, or helping its clients do so.

But before we get carried away with notions of Dimon playing the media to pick up bitcoin on the cheap, there’s a less nefarious reason for the XBT trade: JPMorgan told Reuters that it was just acting as a broker for clients who wanted to buy into the fund. “They are not JPMorgan orders,” a JPMorgan spokesperson told Reuters. “These are clients purchasing third-party products directly.”

In any case, Schweitzer has presented the facts to the Swedish regulator and asked them to investigate. He notes in his complaint that market abuse in Sweden is punishable by up to two years in jail. The Swedish regulator said it does not comment “if we are looking into matters like this or not.” We’ve contacted JPMorgan but have not heard back.