By Edward Woodford
Compiled by: Block unicorn
In a recent conversation on the Joe Rogan Experience, Marc Andreessen (@pmarca) highlighted a worrying trend affecting the financial landscape: debanking. Under pressure from regulators and advocacy groups, financial institutions are increasingly denying banking services to individuals, organizations, and entire industries. I think there are key points about debanking that are missing from the narrative, specifically:
0. Overview
A. Agree on a definition of de-banking
Unbanking is not a binary concept. Rather, it is a general attempt to limit financial services to specific industries, rather than taking a risk-based approach to every player in the space. The fact that Zero Hash and other Tier 1 players in the stablecoin and cryptocurrency space have strong banking partners does not preclude unbanking. Specifically, we hold client and operational funds in multiple top 20 banks.
The counterargument I hear is that banks have the right to decide who they serve based on risk assessment. However, the difference here is:
The emphasis on specific industries is in direct contradiction to guidance issued by the OCC (Office of the Comptroller of the Currency), which makes clear that broad, category-based discrimination against businesses engaged in lawful activities is not permitted.
The FDIC has attempted to unilaterally predetermine a bank’s risk profile, rather than allowing the bank to determine this for itself. Regulators setting risk profiles for legitimate businesses violates the OCC’s long-standing directive that regulated banks should make deposit account decisions based on the bank’s risk assessment of all customer accounts. This is an extreme form of “implicit regulation” (a term I coined in a recent blog), whereby regulation creates a burden so great that it effectively discourages certain activities that are not prohibited by law by making it clear that certain activities will be subject to scrutiny.
B. De-banking is a fact
Of course, the impact of debanking is evident, and we have had bank accounts closed in a single day, including with partners we have been working with since 2017.
The reach is incredible. We were nominated for an award and the nominees dinner was sponsored by a bank. I was disinvited at the bank’s request because “paying for my dinner could cause misunderstandings.”
We operate a multi-jurisdictional business. The same banks bank all of our non-US subsidiaries, but not our US entities. Same owners, same risk profile.
Of the more than 120 banks we have proactively contacted over the past 18 months, approximately 80% have refused to engage in any form of substantive discussion (to examine the risk profile in more detail), purely based on the industry in which we operate.
C. Why should everyone care?
Is this a rights issue? Banking is essential to modern life (and any business), and the arbitrary denial of banking services raises constitutional and ethical concerns.
Higher fees. Essentially distorts the market due to reduced competition.
Concentration risk. The fewer banks that can serve a particular industry, the more risk there is to the customer base.
Andreessen used the term “Operation Choke Point 2.0” (originally coined by @nic__carter), which draws parallels to controversial moves during the Obama administration, when regulators pressured banks to cut ties with legal but politically unpopular industries. Today, the trend has expanded, with industries like cryptocurrency being debanked not because of illegal activity but because of reputational issues or political pressure.
Banking, long considered a neutral utility, has become a battleground for cultural, political and economic conflict. The question we must ask is: when financial access is weaponized, who decides who can participate in the modern economy?
1. The rise of de-banking in the public eye
Since Andreesen’s appearance on November 26, discussion on this topic has accelerated:
November 29 – Former PayPal president and Lightspark co-founder David Marcus (@davidmarcus) shared a post about how political pressure killed Meta’s stablecoin project Libra.
Elon Musk (@elonmusk) reacted to Marcus' post with a "wow."
Coinbase (@coinbase) CEO Brian Armstrong (@brian_armstrong) shared Marcus’ post, adding: “This makes sense — governments putting pressure on banks (again).”
December 4 — U.S. Congressman French Hill (@RepFrenchHill) spoke about the unbanking of the cryptocurrency industry in Congress, promising to “stop, reverse, and investigate Operation Stranglehold 2.0.”
December 6 – Former Silvergate CTO Chris Lane (@D_CentralBanker) shares his experience with regulatory pressure on crypto banks, catching the attention of David Sacks (@DavidSacks), who shares Lane’s post and comments: “Too many stories of people being hurt by killing Operation Smother 2.0. This needs to be investigated.”
December 6 — Court documents filed in a lawsuit against the FDIC reveal letters from the agency asking banks to suspend crypto-related activities. “These letters show that Operation Stranglehold 2.0 is more than just some crypto conspiracy theory,” said Paul Grewal (@iampaulgrewal), chief legal officer at Coinbase.
December 10 – The New York Times published an article by Erin Griffith (@eringriffith) and David Yaffe-Bellany (@yaffebellany) analyzing how debanking has quickly become a “political weapon.”
December 19 — U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce (@HesterPeirce) voted against approving a $400 million budget for the Public Company Accounting Oversight Board (PCAOB), expressing concern in her comments that the commission was “seeking to prevent regulated entities from providing services to the cryptocurrency industry and its participants or otherwise engaging in cryptocurrency through regulatory measures.” Despite Peirce’s opposition, the budget was approved by three other commissioners, including SEC Chairman Gary Gensler.
2. Is banking a right?
Banking is a service provided by private companies. However, in an economy where almost all transactions depend on financial infrastructure, the service operates much like a public utility. Without it, participating in modern life - whether paying bills, collecting wages or obtaining credit - would be nearly impossible.
In conversation with Rogan, Andreesen argued that debanking could infringe on constitutional rights. If banking services are essential to economic participation, then their removal without clear justification — or under opaque political pressure — could amount to a denial of fundamental rights. While the right to banking services is not explicitly enshrined in the Constitution, legal precedent has established that financial activities are closely tied to fundamental rights such as free speech and due process.
The foundation for these debates lies in cases like Buckley v. Valeo (1976) and Citizens United v. Federal Election Commission (2010). Both rulings emphasized that money as a medium of expression is protected by the First Amendment. While these cases centered on campaign finance, they established a principle: The ability to access financial resources is essential to participating in public discourse. If financial services can be arbitrarily denied, it amounts to silencing legitimate voices.
The due process guarantees of the Fifth and Fourteenth Amendments provide another perspective: In Goldberg v. Kelly (1970), the Supreme Court ruled that government benefits that are closely tied to a person's livelihood cannot be terminated without due process. Although banking is provided by private institutions, its importance in modern life qualifies it as a public utility, suggesting that the arbitrary denial of banking services may violate due process protections.
The question of financial neutrality, and specifically unbanking, was tested this year. In NRA v. Vullo (2024), the Supreme Court unanimously ruled that the New York State Department of Financial Services’ superintendent could not use her authority to force banks and insurance companies to cut ties with the NRA. Justice Sonia Sotomayor said that while regulators can have opinions, they cannot force financial institutions to discriminate against legal entities based on their political affiliations.
These rulings confirm that financial exclusion — whether due to direct government coercion or indirect reputational pressure — raises major constitutional questions. As Andreessen noted in the Joe Rogan Experience, “Five years from now, there may be a Supreme Court case that retroactively rules that all of this was illegal.”
3. Legal businesses are legal
At its core, debanking asks a simple question: if an entity operates within the law, should it have access to banking services? The answer seems obvious—but the trend toward debanking legal businesses suggests otherwise.
This should be a non-political statement. The Office of the Comptroller of the Currency (OCC) has issued guidance that it does not allow broad, targeted classification discrimination against businesses engaged in legitimate business activities.
The exclusion of compliant businesses from basic financial services is a dangerous trend — one that risks embedding subjective bias into the backbone of the modern economic infrastructure. If the financial system chooses which legal entities to support, it ceases to be a neutral platform and becomes a tool for enforcing political or cultural agendas.
Fair access is not about forcing banks to take undue risks. It is about ensuring that the financial system remains inclusive and neutral, providing the ability for all legitimate businesses to operate. Without this neutrality, we risk turning the banking industry into a gatekeeping mechanism that stifles innovation and undermines trust in society, thereby undermining trust in one of society’s most critical systems.
4. Zero Hash: A case study in overregulation
At Zero Hash, we’ve experienced these challenges firsthand. Although we operate to the highest standards of regulatory compliance—standards that have earned us the trust of more than 75 institutions, including Interactive Brokers, Stripe, and Franklin Templeton—we still face significant obstacles in securing and maintaining banking relationships.
Our broad licensing demonstrates our commitment to transparency and compliance. We are authorized to conduct business in over 200 jurisdictions around the world, including all U.S. states and territories. In the U.S., our licenses include:
New York Bitlicenses: This is one of the strictest regulatory frameworks for virtual currency businesses.
Money Transmitter Licenses (MTLs): Enable us to do business in all 52 U.S. jurisdictions (50 states plus Washington, D.C., and Puerto Rico) and ensure compliance with state-level requirements for money services businesses.
FinCen is registered as a Money Services Business (MSB): Complying with Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) obligations under federal law.
Even though we have licenses comparable to or even better than traditional financial institutions, they are still reluctant to work with us. In the past 18 months, we have proactively contacted more than 120 banks, and about 80% of them refused to participate in any form of substantive discussion, purely for industry reasons. Among the banks that participated in the discussion, only half conducted due diligence.
This problem is less prevalent in Europe. International banks that are willing to work with us actively do so abroad, but explicitly refuse to work with us in the U.S. Ironically, this is the same bank, dealing with the same company, facing the same risk profile—but U.S. regulatory and political factors create barriers that don’t exist elsewhere. This difference highlights the chilling effect of unclear regulatory frameworks and overregulation, which actively hinders innovation in the U.S. and forces companies to look elsewhere to build their future.
5. The Stakes of Financial Neutrality
Unbanking is more than a logistical hurdle — it directly challenges the principles of fairness, freedom, and trust that our financial system is built on. This is not just about cryptocurrencies; it’s about securing access to modern financial infrastructure for everyone.