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JP Morgan’s ByteDance partnership is facing Senate scrutiny

by Ana Lopez
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A prominent senator criticizes JP Morgan CEO Jamie Dimon over the bank’s development of payment technology for ByteDance, TikTok’s Chinese parent company. Forbes broke the story first.

Senator Marco Rubio, the top Republican on the influential Senate Intelligence Committee, wrote this month to the chairman of JP Morgan, pointing to Chinese laws that could require ByteDance to transfer data to the Chinese government. “Data, including private information of Americans and other foreigners, that is available to ByteDance can also be accessed by Beijing,” Rubio wrote.

Requests for comment from JP Morgan and ByteDance were not immediately met.

Late last year, CIA Director William Burns, FBI Director Christopher Wray, and Treasury Secretary Janet Yellen publicly expressed concern about TikTok’s potential threats to national security, given its connections to China. Meanwhile, the Biden administration has struggled to reach agreement on these matters. Rubio stated, citing the Forbes study:

“With this in mind, you can imagine my alarm when reports recently emerged that JPMorgan Chase is collaborating with ByteDance.”

“It is worrying enough for JPMorgan Chase to ship water to Beijing and mischaracterize ByteDance’s mission. [as] to inspire creativity and enrich life,” he continued, referring to a case study on JP Morgan’s website that describes the work of the giants together. “Even more troubling, however, is that JPMorgan Chase is now actively working with ByteDance to increase its capacity for ‘real-time data exchange, track and trace’ and to ‘see and monitor payments’ in light of its gross misuse of user information. .”

In December, Forbes reported that ByteDance had tracked several Forbes journalists covering the company – accessing their IP addresses and user data – to find out which ByteDance or TikTok employees leaked information to the reporters.

Rubio, who introduced legislation late last Congress to ban TikTok nationwide, said in the letter that this surveillance “was a perfect example of exactly the kind of behavior I’ve repeatedly warned about: ByteDance is misusing its access to an extraordinary repository of user data.”

“By partnering with ByteDance to develop a wealth of private data, including that of millions of Americans, JPMorgan Chase has effectively turned over the combination of the vault to the CCP.”

Lawmakers may target companies and institutions instead, and JP Morgan is not alone. This assumes that CFIUS does not approve a national security agreement or that TikTok is not completely banned in the United States. Bipartisan congressmen pressure ESPN to break off relations with TikTok, and a House Republican proposed this month legislation that would end federal aid to Texas institutions that do not ban the use of TikTok on their campuses.

JP Morgan's ByteDance partnership is facing Senate scrutiny
JP Morgan’s ByteDance partnership is facing Senate scrutiny

Glenn Gerstell, a former National Security Agency general counsel, stated that having JP Morgan handle BByteDance’s “financial plumbing” is not inherently problematic and one could even argue that it “Maybe it’s even beneficial to have a US company with some knowledge of finance.” He used a hypothetical circumstance involving fines to illustrate how it can be beneficial for a US company to have knowledge of Chinese payment systems and how they work.

According to him, it can also be useful for police enforcement. Collaboration like this, according to Gerstell, “steps along a gray continuum” toward helping a major Chinese company increase usage of a social networking site that poses threats to national security.

In mid-February, Rubio demanded Dimon respond to questions about the JP Morgan-ByteDance agreement, including how it affects the privacy of Americans with Chase accounts and who has access to such data.

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