Coinbase CEO Brian Armstrong and tech billionaire Elon Musk have accused prominent political figures including Senator Elizabeth Warren and Security Exchange Commission (SEC) Chairman Gary Gensler of orchestrating a “mass debanking” campaign targeting the tech and crypto sectors during the Biden administration.
His comments certainly follow revelations about secretive actions that allegedly resulted in the bank accounts of dozens of tech entrepreneurs being closed without warning or recourse.
Crypto Leaders Criticize Biden Administration
In a post on X (formerly Twitter), Armstrong called the debanking incidents “unethical and un-American.” He then took aim at Warren and Gensler, accusing them of trying to “illegally kill” the crypto industry.
Brian Armstrong has argued that such actions contributed to the Democratic Party’s defeat in the recent election. The Coinbase executive has warned the party to distance itself from Warren if it wants to recover, especially politically. He also revealed that Coinbase is using Freedom of Information Act (FOIA) requests to uncover the full extent of the problem, raising questions about possible legal violations.
“We are still collecting documents through FOIA requests, so we hope the full story will emerge about who was involved and if they broke any laws. Warren and Gensler tried to illegally kill our entire industry, and that was a major factor in the Democrats losing the election,” Armstrong said.
Armstrong's statements amplified a controversy shared by Elon Musk, known for his defense of freedom of expression and innovation. The SpaceX CEO referenced the topic in an interview by Joe Rogan with Marc Andreessen, co-founder of Andreessen Horowitz.
Did you know that 30 tech founders were secretly debanked? Musk commented.
In the interview, Andreessen alleged that 30 tech founders were “secretly debanked,” describing it as an exercise of “quiet government power.” It highlights the lack of transparency and warns of broader implications for freedom and innovation.
Custodia Bank's Caitlin Long joins the criticism
Caitlin Long, founder and CEO of Custodia Bank, also weighed in, sharing her personal experience with repeated unbanking. Custodia, a pro-crypto bank, has faced regulatory hurdles, culminating in layoffs attributed to the Federal Reserve’s (FED) delays in granting the institution a primary account. Long’s ongoing lawsuit against the Fed seeks to address these challenges, with oral arguments scheduled for January 21, 2025.
Yes—repeatedly unbanked, in the case of my company (Custodia Bank). Keep an eye on our pending lawsuit against the Fed. Oral argument is scheduled for January 21 (the day after Inauguration Day), Long said.
The allegations come amid broader concerns about regulatory overreach in the crypto space. Warren and Gensler have been vocal critics of the industry, and the SEC, under Gensler’s leadership, has pursued multiple enforcement actions against crypto companies. Critics argue that these measures stifle innovation and disproportionately target emerging technologies.
The struggles of Custodia Bank, among others like Consensys, reflect the challenges faced by crypto-friendly financial institutions. The fallout from these allegations could reshape the relationship between the tech sector and U.S. policymakers.
In fact, Brian Armstrong’s claim that these actions contributed to Democrats’ electoral losses highlights the political risk of alienating the tech and crypto communities. Furthermore, Long’s lawsuit could set a precedent for how courts approach claims of regulatory overreach.
The article Brian Armstrong and Elon Musk criticize Biden administration for “mass debanking” was first seen on BeInCrypto Brasil.