The core of decoupling from banks lies in regulatory agencies forcing banks to implement financial repression, thus avoiding direct government accountability.
Author: Nic Carter
Translation by: Deep Tide TechFlow
This week, venture capitalist Marc Andreessen appeared on Joe Rogan's podcast, making some controversial statements regarding the systemic phenomenon of 'decoupling from banks,' particularly in the cryptocurrency industry. At the beginning of the show, he directly named the Consumer Financial Protection Bureau (CFPB) as the behind-the-scenes driver of the decoupling of cryptocurrency startups from banks. The CFPB is an agency spearheaded by Elizabeth Warren. In response, some critics countered that not only is there no so-called decoupling issue, but the CFPB is actually working to end this phenomenon.
Several different issues need to be clarified here. First, what exactly is Marc Andreessen complaining about? Are his concerns justified? Secondly, what role did the CFPB play in the decoupling from politically unpopular entities—was it a promoter or a blocker?
For many leftists, they may not fully understand the cryptocurrency industry and the right's concerns about decoupling from banks. Therefore, following Marc's comments and Elon's support on the X platform, the left generally feels confused or even disbelieving. I think it is essential to read Marc and Joe's conversation in full because many people react based on snippets, while the conversation in fact contains many independent claims and in-depth comments. The complete transcript can be found in the appendix. Let's explore this in detail.
What is Marc Andreessen's main point?
During the show, Marc made several interrelated claims. He first criticized the CFPB as an 'independent' federal agency that is almost unaccountable and capable of 'intimidating financial institutions, hindering new competition, especially those emerging startups trying to challenge big banks.'
Subsequently, he mentioned that decoupling from banks is a specific harm and defined it as "when individuals or companies are completely kicked out of the banking system." Marc pointed out that this phenomenon often occurs through banks acting as agents (similar to the government conducting indirect censorship through big tech companies), with the government maintaining a certain distance to avoid direct accountability.
Marc believes, "Over the past four years, this situation has affected nearly all cryptocurrency entrepreneurs. This phenomenon has also impacted many fintech entrepreneurs and even anyone trying to launch new banking services because the government is trying to protect the existing big banks." Additionally, Marc mentioned some politically unpopular businesses, such as the legal marijuana industry, the escort service industry, and gun shops and manufacturers during the Obama administration. The Department of Justice (DoJ) referred to these actions as 'Operation Choke Point.' Later, the cryptocurrency industry referred to similar phenomena as 'Choke Point 2.0.' Marc stated that this action primarily targets the political enemies of the government and the tech startups they do not support. "Over the past four years, we have seen about 30 founders affected by decoupling from banks."
Marc further pointed out that the victims include "almost all cryptocurrency founders and startups. They are either individually decoupled from banks and forced out of the industry, or their company accounts are closed, leading to an inability to continue operations, even facing lawsuits from the SEC or threats of litigation."
Additionally, Marc mentioned that he knows of some individuals who have experienced decoupling from banks for 'holding unacceptable political views or making inappropriate statements.'
In summary, Marc Andreessen made the following points:
Decoupling from banks refers to individuals or businesses being stripped of banking services. This may occur because their industry is politically unpopular or because they hold political views that differ from the mainstream.
The Consumer Financial Protection Bureau (CFPB) must bear some responsibility for this, along with some unspecified federal agencies involved.
The practical way this phenomenon operates is that regulatory agencies delegate the task of financial oppression to banks, thus allowing the government to avoid direct accountability.
During the Obama administration, the primary victims of decoupling from banks were some legitimate but politically unpopular industries, such as marijuana businesses, adult service industries, and gun shops and manufacturers.
Under the Biden administration, cryptocurrency companies and entrepreneurs, as well as fintech companies, have become the primary targets. Additionally, sometimes conservatives may also experience decoupling due to their political views.
Marc also mentioned that 30 founders from startups in the a16z portfolio have encountered decoupling from banks.
We will evaluate these points in detail at the end of the article.
How do critics view Marc Andreessen's opinions?
In simple terms, left-wing liberals are dissatisfied with Marc's comments. They believe Marc's use of the narrative of 'decoupling from banks' is intended to support the cryptocurrency and fintech industries while ignoring more deserving victims—such as those Palestinians banned from Gofundme for sending money to Gaza. The mainstream left tends to be more direct, often supporting the decoupling of their political opponents, and therefore they tend to avoid discussing the entire issue.
However, there is a segment within the left that maintains a certain ideological consistency, questioning the power of corporations and the government in speech and financial matters. (This group may be expanding, especially as the right regains control of some tech platforms and restores some state powers.) These individuals have spoken out about the issue of decoupling for some time. They recognize that while the primary victims of decoupling are currently right-wing dissidents (such as Kanye, Alex Jones, Nick Fuentes, etc.), this phenomenon could equally occur on the left if the situation were reversed. They define decoupling more narrowly: "Decoupling, or what some financial institutions call 'derisking,' refers to banks terminating business relationships with clients deemed politically incorrect, extreme, dangerous, or otherwise non-compliant." (Quoted from an article by TFP.) In the article, Rupa Subramanya discusses how banks can completely destroy someone's financial life by deeming them to present too high a reputational risk. In fact, individuals from across the political spectrum have been affected—including Melania Trump, Mike Lindell, Trump himself, Christian charities, participants in the January 6 incident, as well as Muslim crowdfunding organizations and charities.
Nonetheless, many leftists remain critical of Marc's views, especially regarding the CFPB. Here are some specific examples:
Lee Fang: The CFPB has been clear in opposing decoupling from banks; why would Andreessen say this? What evidence does he have? What he hasn't mentioned is that the CFPB investigated startup companies supported by Andreessen due to allegations of deceiving consumers, not because of political speech. In fact, the roots of decoupling from banks lie with the FBI and the Department of Homeland Security (DHS), not the CFPB.
Lee Fang: Decoupling from banks is indeed a serious issue. For instance, we see that truck drivers opposing COVID prevention policies lost their bank accounts due to participation in activities, and organizations supporting Palestine are banned from using Venmo. But now, some predatory lenders and scammers are conflating consumer protection with 'decoupling from banks' in an attempt to push for deregulation.
Jarod Facundo: I completely don't understand @pmarca's point. A few months ago, CFPB Director Chopra warned Wall Street against decoupling from conservative individuals without justification.
Jon Schweppe: I agree with @dorajfacundo. I completely don't understand what @pmarca is specifically referring to. The CFPB has consistently led opposition against discriminatory decoupling from banks. What is going on here?
Ryan Grim: The CFPB recently issued a very good new rule specifically targeting banks' behavior of decoupling users due to political views. Yes, this is a left-wing populist CFPB leader standing up for the rights of conservatives. And now, those venture capitalists and Musk who dislike the CFPB are spreading lies to incite public sentiment to weaken the CFPB's power.
Overall, these critics are not friendly to the cryptocurrency and fintech industries. They believe that companies in these industries are not 'real' victims of decoupling from banks, especially when compared to crowdfunding platforms that send money to Gaza. In their view, the cryptocurrency industry is 'getting what it deserves.' They argue that cryptocurrency founders abuse tokens, are involved in scams and fraud, so it is reasonable for banks to take action against them. "If cryptocurrency founders are decoupled from banks, that’s just a banking regulatory issue, and it has nothing to do with us."
Furthermore, these critics argue that Marc is wrong to blame the CFPB. They state that the CFPB is actually an agency dedicated to combating decoupling from banks, and Marc's dissatisfaction with the CFPB stems solely from the fact that the fintech platform he invested in is under strict regulation by the CFPB to ensure that these platforms do not abuse consumer rights.
Since Marc made comments on Rogan's show, many founders in the tech and cryptocurrency industry have come forward to share their experiences of being unilaterally deprived of services by banks. Some in the cryptocurrency industry believe that the unconstitutional attacks from regulators targeting the cryptocurrency industry are coming to an end, and they see a glimmer of hope. Calls for investigations into 'Choke Point 2.0' have also reached a climax. So, who is right? Is Andreessen correct, or are his critics? Is the CFPB really the culprit? Is the phenomenon of decoupling from banks truly as serious as Marc claims? Let's start by exploring the role of the CFPB.
What is the CFPB?
The Consumer Financial Protection Bureau (CFPB) is an 'independent' agency established in 2011 under the Dodd-Frank Act following the financial crisis. Its scope of responsibilities is extensive and includes overseeing banks, credit card companies, fintech companies, payday lenders, debt collectors, and student loan companies. As an independent agency, the CFPB's funding does not rely on Congress (thus avoiding scrutiny of its funding by Congress). Its director cannot be easily dismissed by the president, the agency can directly formulate rules, and initiate enforcement and legal cases in its own name. It can be said that the CFPB possesses considerable power. The establishment of the CFPB was primarily driven by Senator Elizabeth Warren.
The CFPB has been a target of attack from conservatives and libertarians because it is a new federal agency that is almost unaccountable. It was established under the guidance of Elizabeth Warren, who is a frequent target of criticism from the right. The CFPB's goal is effectively to 'regulate' fintech companies and banks. However, most of these companies are already under strict regulation. For example, banks must be supervised by state or federal (OCC) authorities and report to the FDIC, the Federal Reserve (Fed), and the SEC (if publicly traded). Credit unions, mortgage companies, and others also have their own regulatory bodies. Before the CFPB was established, there was no significant regulatory gap in U.S. financial oversight. In fact, the U.S. has more financial regulatory agencies than any other country in the world. Therefore, the right's skepticism about Elizabeth Warren's motives is not without reason.
Regarding the CFPB's scope of responsibilities:
The CFPB's mandate includes some explicit provisions against discrimination in banking services. These include the Equal Credit Opportunity Act (ECOA) and the UDAAP section of the Dodd-Frank Act. According to the ECOA, discrimination in credit transactions based on the following protected categories is prohibited: race, color, religion, nationality, sex, marital status, age, or whether one receives public assistance.
However, the 'Choke Point' issue raised by Marc Andreessen does not fall within the purview of these provisions. 'Cryptocurrency entrepreneurs' or 'conservatives' do not belong to the legally defined protected categories. Therefore, even in theory, this portion of the CFPB's authority cannot address politically motivated attacks against specific industries. Moreover, the ECOA primarily concerns credit services, not the overarching issues of banking services.
The UDAAP section of the Dodd-Frank Act is another provision that may involve decoupling from banks. This provision grants the CFPB broad authority to combat actions deemed unfair, deceptive, or abusive. For example, the large settlement agreement the CFPB reached with Wells Fargo was based on UDAAP. In theory, if the CFPB were to address the issue of decoupling from banks, it could do so through UDAAP. However, beyond issuing some statements, they have yet to take practical action.
CFPB's official statement
CFPB Director Rohit Chopra clearly opposed the banning of users by payment platforms for political motives in a speech at a Federalist Society event in June of this year. In his speech, he expressed concern about large tech payment platforms (like PayPal and Venmo) irresponsibly banning users, especially when these platforms provide no opportunity for users to appeal. He specifically mentioned that these platforms might exclude users because they expressed politically unpopular views elsewhere. This phenomenon does exist, and Chopra's ability to publicly discuss these issues is encouraging.
However, two problems exist here.
Firstly, Chopra's focus is mainly on the irresponsible behavior of private enterprises, particularly when these enterprises exhibit monopolistic characteristics. He has not addressed the risk of government power, which could compel banks to implement 'redlining' against entire industries through regulatory tools. And this is precisely the crux of Marc Andreessen's criticism.
Secondly, although Chopra's remarks are commendable, the CFPB's actual actions in this regard remain limited. Based on current trends, they may regulate large non-bank payment networks. However, the issues surrounding 'Choke Point 2.0' involve more government pressure applied to banks through financial regulatory agencies. Such issues fall outside the CFPB's responsibilities and are handled by the Federal Reserve (Fed), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the executive departments responsible for regulating these institutions (or Congress in investigatory cases). The CFPB does not have the authority to regulate other financial regulatory agencies, so its ability to address 'Choke Point'-style behavior is limited. (It’s worth noting that Chopra is a member of the FDIC board, so he bears some responsibility for at least some of the FDIC's misconduct or is at least aware of it.)
Notably, the CFPB stated in a court document this August that the decoupling of Christians from banks is a form of discrimination and noted that the agency has the statutory authority to address this issue. This statement was seen by Lee Fang as a positive (and surprising) development, as the CFPB had not previously shown much sympathy for conservative groups. As mentioned earlier, religious groups are classified as a 'Protected Class' under the law, so there is little controversy about the CFPB intervening in financial exclusion against religious groups. However, we have yet to see the CFPB take similar action against non-protected classes (such as ordinary conservatives or industries like cryptocurrency), which will be explored in more detail in the next section. Nevertheless, this initiative is undoubtedly a step in the right direction.
CFPB's actions
Recently, the CFPB finalized a new rule that brings digital wallets and payment applications under its regulatory umbrella, treating them as bank-like institutions. According to this rule, large digital payment platforms, including Cash App, PayPal, Apple Pay, and Google Wallet, are required to provide transparent explanations for account closures. In the rule announcement, the CFPB explicitly mentioned the phenomenon of 'decoupling from banks.' However, it is important to note that this rule applies to 'large tech companies' or peer-to-peer payment applications, not banks. No enforcement actions have yet been taken under this rule, so we cannot assess its effectiveness in practice.
So, will this rule curb behaviors like 'Choke Point 2.0'? The answer is almost no. First, this rule only addresses the behavior of tech companies, not banks. Second, 'Choke Point'-like behavior is not autonomously decided by banks, but rather is systemic pressure imposed on the entire industry by federal regulatory agencies through banks. If the CFPB notices, for example, that cryptocurrency startups are systematically being cut off from banking services, they would have to confront the FDIC, the Federal Reserve (Fed), the OCC, and even the White House directly to terminate such practices. However, given Elizabeth Warren's strong opposition to cryptocurrency, one cannot help but question whether the CFPB would take such action. More importantly, the essential issue of 'Choke Point' is that banking regulators exceed legal boundaries in attempting to decouple an entire industry rather than being an independent action by individual banks (which merely execute the orders of regulatory agencies passively).
In theory, under UDAAP provisions, if a particular industry (such as cryptocurrency) experiences systemic account closures, the CFPB has the authority to investigate this. However, the recently implemented payment application rule (which some critics of Marc Andreessen cite to demonstrate the CFPB's anti-decoupling stance) does not apply to banks. Moreover, the CFPB has yet to take substantial action regarding the issue of decoupling from banks in its actual enforcement actions.
Key enforcement actions of the CFPB
In the enforcement records of the CFPB, I found no settlements directly related to decoupling from banks. Here are their top 30 settlements sorted by amount:
The closest relevant case is the 2023 Citigroup case. At that time, they were found to discriminate against Armenian Americans in credit card applications. According to Citigroup, this practice was due to a higher fraud rate in the Armenian community in California (caused by fraud rings). Ultimately, Citigroup paid a fine of $25.9 million.
Another case is the 2020 Townestone Financial case. The CFPB found that the company discouraged African Americans from applying for mortgages in its marketing, resulting in a $105,000 fine.
It is important to note that nationality and race fall under the definition of 'Protected Class' in U.S. law; thus, these cases do not involve purely political 'redlining.' This represents a fundamental difference from critics' accusations against the cryptocurrency industry's decoupling.
Additionally, I reviewed the last 50 settlement cases from the CFPB since March 2016 and found no cases involving the arbitrary deprivation of banking services. Out of these 50 cases, 15 involved UDAAP violations (like the infamous Wells Fargo case), 8 involved fair lending violations, 5 involved student loan servicing, 5 involved inaccurate credit reporting, 5 involved mortgage servicing, 4 involved auto loan discrimination, and 3 involved illegal overdraft practices. As for the issue of decoupling from banks: there are none.
Criticism of Marc regarding the decoupling of cryptocurrency/fintech companies and conservatives
In this matter, the situation is very clear. I have documented in detail the phenomenon known as 'Choke Point 2.0.' This practice originated during the Obama administration and re-emerged under the Biden administration. In 2013, Obama's Department of Justice (DoJ) launched the 'Operation Choke Point' program, an official initiative aimed at targeting some legitimate but politically unpopular industries, such as payday lending, medical marijuana, the adult industry, and gun manufacturers. Iain Murray discussed this in detail in his article (Choke Point: What it is and Why it Matters).
During the Obama administration, the FDIC, under the leadership of Marty Gruenberg, persuaded banks to 'derisk' companies in over a dozen industries through insinuation and threats. This practice sparked strong protests from conservatives and was exposed by members of the House led by Congressman Luetkemeyer. Critics argue that this form of secret regulation through 'persuasion' is unconstitutional because it did not go through formal rule-making or legislative processes.
In 2014, a memo from the Department of Justice regarding this practice was leaked, and subsequently, the House Oversight and Government Reform Committee released a critical report. The FDIC then issued new guidance requiring banks to assess risks on a case-by-case basis rather than implementing 'redlining' across the entire industry. In August 2017, the Trump administration's Department of Justice officially terminated this practice. In 2020, Trump’s Comptroller of the Currency, Brian Brooks, issued the 'Fair Access' rule aimed at terminating decoupling from banks based on reputational risk.
However, in May 2021, Biden's Acting Comptroller of the Currency, Michael Hsu, rescinded this rule. In early 2023, following the collapse of FTX, people in the cryptocurrency industry, including myself, noticed that similar 'Choke Point' strategies were being implemented against cryptocurrency founders and companies. In March 2023, I published an article (Choke Point 2.0 is underway, cryptocurrencies are the target), and a follow-up article in May revealed more new situations.
Specifically, I found that the FDIC and other financial regulators secretly imposed a '15% deposit limit' policy targeting companies related to cryptocurrency. This means that banks are not allowed to receive deposits from cryptocurrency-related enterprises that exceed 15% of their total deposits. Additionally, I believe that Silvergate and Signature banks within the cryptocurrency industry did not collapse due to market reasons, but rather were forced to liquidate or close due to the government's hostile stance toward the cryptocurrency industry.
Since then, cryptocurrency companies continue to face significant challenges in obtaining banking services—even though there are no public regulations or legislation explicitly requiring banks to limit services to cryptocurrency enterprises. The law firm Cooper and Kirk pointed out that the practices of 'Choke Point 2.0' violate the Constitution.
Recently, I re-examined this phenomenon and discovered new evidence suggesting that Silvergate Bank did not naturally collapse but was 'intentionally executed.'
(See tweets)
Currently, the '15% deposit limit' policy targeting cryptocurrency banks still exists, severely restricting industry development. Almost all domestic cryptocurrency entrepreneurs in the U.S. have been affected by this—I can confirm that about 80 cryptocurrency companies we invested in have faced similar issues. Even my company, Castle Island (a venture capital fund that only invests in fiat-related businesses), has experienced sudden account closures.
After Marc appeared on Rogan's show, many executives in the cryptocurrency industry also shared their experiences. David Marcus revealed that Facebook's Libra project was forced to cease due to intervention from Janet Yellen. Kraken CEO Jesse Powell, Joey Krug, Gemini CEO Cameron Winklevoss, Visa's Terry Angelos, and Coinfund's Jake Brukhman all indicated that their companies encountered serious obstacles in banking services. Caitlin Long has long publicly opposed 'Choke Point 2.0' and even founded her own bank, Custodia, but Custodia was stripped of its Master Account qualification by the Federal Reserve, preventing it from operating normally.
Although critics may lack sympathy for the cryptocurrency industry, it must be acknowledged that the cryptocurrency industry is a completely legitimate sector that has been suppressed due to secret directives and insinuations from banking regulators. This suppression is not carried out through legislation or public rule-making, but rather operated behind the scenes by administrative agencies, bypassing democratic processes.
Not only the cryptocurrency industry but fintech companies are also facing similar dilemmas. According to research by Klaros Group, since early 2023, one-quarter of the FDIC's enforcement actions have targeted banks that partner with fintech companies, while only 1.8% of enforcement actions were against banks that do not partner with fintechs. As an investor in the fintech space, I can personally attest that fintech companies face immense challenges in finding banking partners, a difficulty that is almost on par with the challenges faced by cryptocurrency companies in obtaining banking services.
(The Wall Street Journal) criticized the FDIC for this action, pointing out that the agency was "effectively engaging in rule-making while circumventing the notice and public comment requirements of the Administrative Procedure Act." This behavior has caused substantial harm to the industry and has raised widespread questions about its legitimacy.
Andreessen mentioned that there are indeed numerous instances supporting the issue of conservatives being decoupled from banks. For example, Melania Trump mentioned in her recent memoir that she had her bank account canceled. The right-wing social platform Gab.ai also faced similar issues. In 2021, General Michael Flynn had his account closed by JPMorgan due to perceived 'reputational risk.' In 2020, Bank of America closed the account of the Christian non-profit Timothy Two Project International and froze the account of Christian pastor Lance Wallnau in 2023. In the UK, Nigel Farage was decoupled from Coutts/NatWest, which sparked a small public uproar. These are just a few among many cases.
Under current law, U.S. banks have the right to close accounts for any reason without providing explanations to customers. Therefore, in essence, Andreessen's point is correct: the phenomenon of decoupling from banks does exist and has far-reaching implications.
The controversy over the term 'decoupling from banks'
Critics argue that Andreessen is trying to use the concept of 'decoupling from banks' to push his economic agenda. Some point out that his motivation for focusing on this issue is to alleviate regulatory pressure on the cryptocurrency and fintech industries. Lee Fang mentioned:
"Decoupling from banks is indeed a significant issue. We see that truck drivers opposing the COVID vaccine mandate lost their bank accounts due to their activities, and organizations supporting Palestine are unable to use payment platforms like Venmo. But now, some predatory lenders and scammers are conflating consumer protection with 'decoupling from banks' to call for deregulation."
Moreover, an Axios author hinted that the issue Marc focuses on regarding the CFPB may be related to his company's investment in some controversial new banks, such as Synapse, which closed earlier this year. This criticism suggests that Andreessen is only concerned about 'decoupling' to promote the interests of the cryptocurrency and fintech industries while evading the CFPB's consumer protection regulations.
Although critics' points may sound logical, the reality is more complex. Historically, the Obama administration indeed developed strategies to use banking regulations to suppress certain industries (such as gun manufacturing and payday loans), which were deemed unconstitutional. The Biden administration has further optimized these strategies and effectively applied them to suppress the cryptocurrency industry. For instance, by pressuring partner banks, the government has indirectly restricted banking services for cryptocurrency companies. These practices have not come about through legislation or public rule-making, but rather through administrative means operating behind the scenes, bypassing democratic procedures.
Currently, this strategy is also beginning to target the fintech industry. According to research by Klaros Group, since early 2023, one-quarter of the FDIC's enforcement actions have targeted banks working with fintech companies, while only 1.8% of enforcement actions were against banks that do not partner with fintechs. As an investor in the fintech space, I can personally attest that this practice has made it exceedingly difficult for fintech companies to find banking partners, almost on par with the challenges faced by cryptocurrency companies in obtaining banking services.
These phenomena indicate that the power of administrative agencies has overstepped its bounds and has severely impacted multiple legitimate industries. Whether it's the cryptocurrency or fintech industry, a more transparent and democratic regulatory approach is needed, rather than relying on secret directives and vague policy enforcement. In the future, as regulatory policies shift, these issues may gradually be exposed and corrected.
Whether or not commentators like Fang believe that the Biden administration's decoupling actions against cryptocurrency companies will undermine his moral critique of the decoupling of more sympathetic groups is not the point. The fact is, this phenomenon does occur, and it is illegal decoupling from banks. Similarly, whether Marc Andreessen's criticism of the CFPB is economically motivated is also not important. (According to my investigation, the CFPB has yet to take any enforcement action against any company invested in by Andreessen's venture capital firm a16z.)
Importantly, banking regulators (not just the CFPB, but multiple agencies) have indeed weaponized the financial system to achieve political goals. This behavior has far exceeded the authorization of administrative powers and has harassed legitimate industries. The fact is, this overreach does exist.
Evaluation of Andreessen's views on the Rogan show
Based on a comprehensive analysis, we can evaluate the arguments presented by Andreessen point by point:
Decoupling from banks refers to individuals or businesses being stripped of banking services due to their industry being politically unpopular or holding dissenting political views.
This definition is accurate. Importantly, the severity of decoupling should not be altered based on whether the victims meet some people's standards of sympathy.
The CFPB does indeed often take a hardline approach toward fintech companies and banks, and its necessity is worth questioning.
However, based on existing information, the CFPB is not the primary responsible party for 'Choke Point 2.0.' The more direct responsible parties are the FDIC, OCC, and the Federal Reserve, which have coordinated actions with the Biden administration. Although the CFPB has made some statements regarding the issue of decoupling from banks, it has not taken specific actions, so it neither alleviates the problem nor is it the primary responsible party.
The core of decoupling from banks lies in regulatory agencies forcing banks to implement financial repression, thus avoiding direct government accountability.
This model is similar to the way large tech companies use to censor dissenters. By having banks or fintech platforms refuse service, it can effectively suppress 'enemies of the regime' while avoiding excessive external scrutiny.
The 'Choke Point' during the Obama administration focused on targeting some legitimate but unpopular industries, including marijuana companies, the adult industry, as well as gun shops and manufacturers.
This description is accurate. In fact, this action initially began in the payday loan industry, but Andreessen did not mention that.
The Biden administration's decoupling actions primarily target cryptocurrency companies and fintech firms, while occasionally involving conservatives.
Both points are true. We have more evidence indicating that the crackdown on the cryptocurrency industry is a coordinated action, while the crackdown on the fintech industry, though less evidenced, has seen the FDIC indirectly pressure partner banks through enforcement actions. As for conservatives being decoupled from banks, we have a wealth of anecdotal evidence, but no internal bank policy explicitly targeting conservatives. Such actions are typically justified on the grounds of 'reputational risk' and decided on a case-by-case basis. Ultimately, banks are a black box; they are not required to provide reasons for lowering the risk for individuals or companies.
Founders in the a16z portfolio being decoupled from banks
Based on existing information, it is entirely possible—and even very likely—that 30 founders from the a16z portfolio have experienced decoupling from banks. As an active investment institution in the cryptocurrency space, many of a16z's investments involve cryptocurrency, and almost all domestic cryptocurrency startups have faced banking service issues at some point.
Where is Marc wrong?
Marc exaggerates the role of the CFPB. The recent crackdown on the cryptocurrency and fintech industries is actually more led by regulatory agencies like the FDIC, OCC, and the Federal Reserve, rather than the CFPB. However, Marc did mention some unspecified 'agencies' involved in decoupling, although he did not specifically mention the FDIC, OCC, or Federal Reserve. Furthermore, the influence of CFPB founder Elizabeth Warren on this matter should not be overlooked. She is one of the main proponents of 'Choke Point 2.0,' particularly with Bharat Ramamurti, whom she appointed, leading related actions in the Biden administration's National Economic Council. Therefore, it is understandable that Marc amplifies the responsibility of the CFPB.
Marc's discussion of PEPs is somewhat one-sided. Being classified as a politically sensitive person does not directly lead to account closures, but it does increase banks' due diligence requirements for these clients. Marc may have been inspired by the case of Nigel Farage being decoupled from Coutts. In that case, Nigel was considered a PEP, which was indeed a factor, but not the sole reason.
Despite some discrepancies in details, Marc's main point is correct, while the critics' rebuttals do not hold up. The CFPB has yet to become an effective force against decoupling from banks, and the phenomenon of decoupling indeed exists, having particularly pronounced effects on the cryptocurrency and fintech industries. As Republicans take control of Congress and launch relevant investigations, more evidence is expected to reveal the true scale and mechanisms of decoupling.
