Claims of politically motivated “de-banking” by US regulators have sparked debate, with prominent voices alleging a crackdown on cryptocurrency executives and political opponents. However, experts suggest that evidence supporting these accusations remains scant.
Allegations and Accusations
Marc Andreessen, a web browser pioneer, recently reignited the controversy, claiming on Joe Rogan’s podcast that regulators appointed by President Joe Biden directed banks to cut ties with certain individuals and businesses. Andreessen described the alleged initiative as “Operation Chokepoint 2.0,” claiming around 30 tech start-up founders had been affected.
Andreessen’s remarks also targeted the Consumer Financial Protection Bureau (CFPB), which he incorrectly labeled as “Elizabeth Warren’s personal agency.” While Senator Warren conceptualized the CFPB, she has never led it. Andreessen later walked back parts of his statements, but his claims have fueled wider skepticism among tech leaders and cryptocurrency advocates.
Regulatory Reality
According to experts, there is no formal directive from Washington instructing banks on whom they can serve. Banks operate under regulatory guidance that prioritizes identifying potentially illegal activities and assessing risks associated with high-stakes sectors like cryptocurrency. Banks ultimately decide whether working with certain clients aligns with their financial interests and compliance standards.
Operation Chokepoint, which Andreessen referenced, was a 2013 initiative targeting fraud in the payday lending sector. Republicans have criticized it as a misuse of regulatory power against lawful businesses, although experts like Dru Stevenson, a law professor at South Texas College of Law, consider such claims more myth than reality.
Cryptocurrencies Under Scrutiny
The cryptocurrency sector has faced heightened regulatory skepticism due to its volatility and association with illicit activities like money laundering. Recent collapses of crypto-focused banks such as Silvergate and Signature in March 2023 have reinforced concerns about the industry’s risks. “It’s a volatile sector that is inconsistent with banking,” noted Steven Kelly, associate director at the Yale Program on Financial Stability.
Tech and Finance Dynamics
Despite these challenges, regulators have occasionally extended support to tech firms. For example, the Biden administration’s response to Silicon Valley Bank’s 2023 collapse ensured that uninsured depositors, many of them tech companies, were fully protected to prevent systemic financial instability.
Political Responses
The issue of de-banking has also resonated with political figures. In her memoir, Melania Trump described her shock when her bank closed her account, suggesting political bias may have played a role. Donald Trump has vowed to implement policies ensuring “fair access” to banking services and preventing political discrimination by financial institutions.
As lawmakers debate the extent of regulatory oversight, the controversy surrounding de-banking highlights tensions between political perceptions and financial sector realities.
