If you mention anything related to 'cryptocurrency' or 'Web3', you will be rejected.
Written by: Austin King, co-founder of Omni Network
Compiled by: Luffy, Foresight News
Recently, a16z co-founder Marc Andreessen revealed that many founders have faced threats from the banking system. I am one of them: out of fear of retaliation, I have never publicly spoken about this.
So what is it really like when it happens to you? My personal first experience was in 2021 when I was trying to open the company's first bank account.
The beginning of the story
When I was preparing to open our first account, several banks rejected me. Whenever you are about to open a business account, the bank will ask what your company does. If you mention anything related to 'cryptocurrency' or 'Web3', you will be rejected. After mentioning these terms and being rejected multiple times, you begin to realize what is happening, and I started using phrases like 'early fintech startup.' Eventually, this worked, and I successfully opened a bank account, which allowed me to conduct business operations in this country.
Repeated strikes
Is it just like that? No, it is a repeated and ongoing process of strikes. Once you have one account, you realize that having just one account is a serious risk for the business. You will eventually receive an email with a subject like this:
You will open it, but this request really doesn't make much sense because they already have the documents they requested, but you will still comply with the requirement to submit documents. The issue is that compliance does not resolve the problem; even if we promptly respond with all the requested documents, our accounts are still arbitrarily frozen.
This account freeze has prevented us from paying salaries. My team has a lot of faith in me, but when the company can't pay salaries, you start to question whether this is a stable place you can work long-term. When you hear from the boss, 'Honestly, we have the funds, we've submitted all the requested documents almost immediately, I really believe we are being targeted because we are involved in cryptocurrency work,' you can't be sure. Here's another example:
Sounds reasonable, right? They just want a few documents and gave us 5 business days. The problem is: sometimes they don't even respond within 5 business days; it's not about submitting documents, but about them approving the documents. They simply request the same documents that have already been submitted without explaining what the issues are with those documents. This strategy reflects how the SEC has stifled cryptocurrency in the U.S. over the past 4 years: unclear rules, making people operate in a fog, suffocating them with bureaucratic ambiguity rather than directly attacking them.
We are not the only victims. I have spoken with many investors from Omni, and they have found this happening in many of their investment projects, to the point where their portfolio support teams actively help teams set up multiple independent bank accounts to mitigate risks.
Why can I talk about this now?
Because if someone like Marc Andreessen is publicly talking about this, I feel the chances of being targeted alone would decrease. I hadn't spoken out before because I feared it would bring more risks to me personally and to the business. The main reason I am publishing this article is to provide further evidence that this is a real issue stifling American innovation. Over the past 4 years, the government has actively pushed cryptocurrency innovation overseas. I think this is really dangerous for the U.S. We need to take a leadership role in the crypto space rather than pushing innovation to arbitrary countries like the Bahamas. Cryptocurrency is a technology that has the potential to significantly enhance the sovereignty and personal freedom of people around the world. I really can't think of any other technology that aligns with the 'American Dream' like cryptocurrency does.