Original title: Marc Andreessen is right about Debanking
Original author: Nic Carter
Original translation: TechFlow
Venture capitalist Marc Andreessen was a guest on Joe Rogan’s podcast this week and made some controversial comments about systemic “debanking”, especially in the crypto industry. He opened the show by directly naming the Consumer Financial Protection Bureau (CFPB) as the driving force behind the debanking of crypto startups. The CFPB was founded by Elizabeth Warren. In response, some critics countered that not only is there no so-called debanking problem, but the CFPB is actually working to end it.
There are a few different issues to unpack here. First, what exactly is Marc Andreessen complaining about? Are his concerns warranted? Second, what role does the CFPB play in the debanking of politically unpopular entities—is it an enabler or a blocker?
For many on the left, they may not be aware of the crypto industry and the right-wing concerns about debanking. Therefore, there was general confusion and even disbelief in the left camp after Marc's remarks and Elon's support on the X platform. I think it is necessary to read the conversation between Marc and Joe in full first, because many people only react based on fragments, and this conversation actually contains many independent claims and in-depth comments. Please see the appendix for the full transcript. Let's explore it in detail below.
What are Marc Andreessen’s main points?
During the show, Marc made several interrelated claims. He first criticized the CFPB as an "independent" federal agency with little oversight that is able to "intimidate financial institutions and block new competition, especially emerging startups that seek to challenge the big banks."
He then mentioned debanking as a specific harm, defining it as “when a person or company is completely kicked out of the banking system.” Marc noted that this phenomenon often occurs through banks as agents (similar to indirect censorship by governments through big tech companies), while governments remain at arm’s length to avoid direct responsibility.
Marc believes that "this has affected almost all crypto entrepreneurs over the past four years. This phenomenon has also affected many fintech entrepreneurs and even anyone trying to launch new banking services because the government is trying to protect existing big banks." In addition, Marc also mentioned some politically unpopular businesses, such as the legal marijuana industry, the escort service industry, as well as gun shops and manufacturing during Obama's administration. The Department of Justice (DoJ) called these actions "Operation Choke Point" at the time. Later, the crypto industry referred to a similar phenomenon as "Choke Point 2.0." Marc said that this action is mainly aimed at political enemies of the government and technology startups they do not support. "In the past four years, we have seen about 30 founders affected by debanking."
Marc further pointed out that the victims include "almost all crypto founders and startups. They are either personally debanked and forced to exit the industry, or their company accounts are closed, making it impossible to continue operations, or even sued by the U.S. Securities and Exchange Commission (SEC), or threatened with prosecution."
Additionally, Marc mentioned that he knows of people who have been debanked for “holding unacceptable political views or making inappropriate comments.”
In summary, Marc Andreessen made the following points:
Debanking occurs when a person or business is deprived of banking services. This may be because they work in a politically unpopular industry or because they hold political views that differ from the mainstream.
The Consumer Financial Protection Bureau (CFPB) is at least partly responsible, and several unnamed federal agencies are also involved.
The way this works in practice is that regulators delegate the task of financial oppression to banks, allowing governments to avoid direct responsibility.
· During the Obama administration, the main victims of debanking were legal but politically unpopular industries, such as marijuana businesses, the adult services industry, and gun stores and manufacturers.
Under the Biden administration, crypto businesses and entrepreneurs, as well as financial technology companies (Fintechs), have become a major target. In addition, conservatives are sometimes debanked because of their political views.
· Marc also mentioned that 30 tech startup founders in the a16z portfolio had experienced debanking.
We will evaluate these viewpoints in detail at the end of the article.
What do critics think of Marc Andreessen’s views?
Simply put, left-wing liberals are unhappy with Marc's remarks. They believe that Marc borrows the "debanking" narrative to support the crypto industry and fintech, while ignoring victims who deserve more attention - such as Palestinians who were banned by Gofundme for sending remittances to the Gaza Strip. The mainstream left is more direct and usually supports the debanking of its political opponents, so it tends to avoid the whole issue.
However, there is a segment of the left that has maintained some ideological consistency and is skeptical of the power of corporations and governments over speech and finance. (This group may be growing, especially as the right has retaken some tech platforms and restored some state power.) These people have been vocal about debanking for some time. They recognize that while the main victims of debanking so far are right-wing dissidents (Kanye, Alex Jones, Nick Fuentes, etc.), if the situation is reversed, this phenomenon could also happen to the left. They have a narrower definition of debanking: "Debanking, or as some financial institutions call it, 'derisking,' refers to the termination of business relationships with customers who are considered politically incorrect, extreme, dangerous or otherwise unacceptable." (Quoted from a TFP article). In the article, Rupa Subramanya discusses how banks can completely destroy someone's financial life by deeming them to be too high a reputational risk. In fact, people from across the political spectrum were affected — including Melania Trump, Mike Lindell, Trump himself, Christian charities, January 6th participants, and Muslim crowdfunding organizations and charities.
Still, many on the left are critical of Marc’s ideas, especially the part about the CFPB. Here are some specific examples:
Lee Fang: The CFPB has been clearly against de-banking, why would Andreessen say that? What evidence does he have? What he didn't mention is that the CFPB investigated the startups Andreessen backed because they were suspected of defrauding consumers, not because of political speech. In fact, the root of de-banking lies with the FBI and the Department of Homeland Security (DHS), not the CFPB.
Lee Fang: Debanking is indeed a serious problem. For example, we have seen truck drivers who opposed the COVID-19 epidemic prevention policy lose their bank accounts because of their participation in activities, and organizations supporting Palestine were banned from using Venmo. But now, some predatory lenders and scammers are confusing consumer protection with "debanking" and trying to use it to promote deregulation.
Jarod Facundo: I have absolutely no idea what @pmarca is saying. Just a few months ago, CFPB Director Chopra warned Wall Street against unprovoked de-banking of conservatives at a Federalist Institute event.
Jon Schweppe: I agree with @dorajfacundo. I have absolutely no idea what @pmarca is referring to specifically. The CFPB has been leading the fight against discriminatory debanking. What is going on here?
Ryan Grim: The CFPB recently issued a very good new rule specifically targeting banks for debanking users based on political views. Yes, this is a left-wing populist CFPB head standing up for conservative rights. And now, venture capitalists and Musk who don't like the CFPB are spreading lies and trying to stir up public sentiment to weaken the CFPB's power.
In general, these critics are not kind to the cryptocurrency and fintech industries. They believe that companies in these industries are not "real" victims of debanking, especially compared to crowdfunding platforms that send money to the Gaza Strip. In their view, the crypto industry "has its own way." They believe that cryptocurrency founders are abusing tokens, suspected of scams and fraud, so it is natural for banks to take action against them. "If crypto founders are debanked, it is only a problem for bank supervision and has nothing to do with us."
Furthermore, these critics believe that Marc’s mistake is to put the blame on the CFPB. They say that the CFPB is precisely an agency dedicated to combating de-banking, and Marc is dissatisfied with the CFPB simply because the fintech platforms he invested in are strictly regulated by the CFPB to ensure that these platforms do not abuse consumer rights.
Since Marc’s comments on Rogan’s show, many founders in the tech and crypto industries have come forward to tell their experiences of being unilaterally deprived of services by banks. Some in the crypto industry believe that the unconstitutional attacks by regulators against the crypto industry are coming to an end and they see light at the end of the tunnel. Calls for an investigation into “Operation Choke Point 2.0” have also reached a climax. So who is right? Is it Andreessen or his critics? Is the CFPB really to blame? Is the phenomenon of debanking really as serious as Marc says? Let’s start with the role of the CFPB.
What is the CFPB?
The Consumer Financial Protection Bureau (CFPB) is an "independent" agency that was established in 2011 under the Dodd-Frank Act in the aftermath of the financial crisis. Its responsibilities are very broad, including overseeing banks, credit card companies, fintech companies, payday lenders, debt collection agencies, and student loan companies. As an independent agency, the CFPB is not dependent on Congress for funding (and is therefore immune to congressional funding scrutiny). Its director cannot be easily removed by the president, and the agency can directly make rules and bring enforcement and legal cases in its own name. It can be said that the CFPB has considerable power. The establishment of the CFPB was largely driven by Senator Elizabeth Warren.
The CFPB has been a target of attack from conservatives and libertarians because it is a new federal agency and has little oversight. It was created by Elizabeth Warren, a common target of criticism from the right. The goal of the CFPB is to effectively "regulate" fintech companies and banks. However, most of these companies are already heavily regulated. For example, banks are subject to state or federal (OCC) supervision, while also reporting to the FDIC, the Federal Reserve (Fed), and the SEC (if they are public companies). Credit unions, mortgage lenders, etc. also have their own regulators. Before the CFPB was established, there were no obvious gaps in financial regulation in the United States. In fact, the United States has more financial regulators than any other country in the world. Therefore, it is not without reason that the right wing is suspicious of Elizabeth Warren's motives.
Regarding the CFPB’s responsibilities:
The CFPB’s mandate includes some provisions that explicitly prohibit discrimination in banking services. These include the “unfair, deceptive, or abusive practices (UDAAP)” section of the Equal Credit Opportunity Act (ECOA) and the Dodd-Frank Act. Under ECOA, credit transactions cannot be discriminated against based on protected categories: race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.
However, the “Choke Point” issue raised by Marc Andreessen is not actually covered by these regulations. “Crypto entrepreneurs” or “conservatives” do not fall into the protected categories defined by the law. Therefore, this part of the CFPB’s authority cannot, even in theory, address political attacks on specific industries. In addition, ECOA focuses on credit services, not the overall problem of banking services.
The UDAAP section of Dodd-Frank is another provision that could potentially address unbanking. This provision gives the CFPB broad authority to crack down on practices that are deemed unfair, deceptive, or abusive. For example, the CFPB’s massive settlement with Wells Fargo was based on UDAAP. In theory, if the CFPB were to address unbanking, it could do so through UDAAP. However, beyond some statements, they have not taken any real action yet.
CFPB’s official statement
CFPB Director Rohit Chopra spoke out against politically motivated bans at a Federalist Society speech in June. In the speech, he expressed concerns about large tech payment platforms, such as PayPal and Venmo, banning users irresponsibly, especially when these platforms do not give users any opportunity to appeal. In particular, he mentioned that these platforms may exclude users because they have expressed politically unpopular views elsewhere. This phenomenon does exist, so it is encouraging that Chopra is openly discussing these issues.
However, there are two problems here.
First, Chopra’s focus is primarily on the irresponsible behavior of private companies, especially when these companies have monopoly-like characteristics. He does not touch on the risk of government power, that is, the possibility that the government, through regulatory tools, forces banks to “redline” entire industries. This is exactly the focus of Marc Andreessen’s criticism.
Second, while Chopra’s comments are worthy of praise, 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 of Choke Point 2.0 are more about the power that the government exerts over banks through financial regulators. Such issues are not within the CFPB’s purview, but rather the responsibility of the Federal Reserve (Fed), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the executive branch (or Congress in the case of an investigation) that oversees these institutions. The CFPB does not have the power to oversee other financial regulators, so their ability to address Choke Point-style behavior is limited. (It is worth noting, however, that Chopra was a member of the FDIC board, so he was at least partially responsible for, or at least had knowledge of, some of the FDIC’s misconduct.)
Notably, the CFPB explicitly stated in a court filing in August that the debanking of Christians is a form of discrimination, noting that the agency has statutory authority to address the issue. This statement was considered by Lee Fang to be a positive (and surprising) development, as the CFPB has not been particularly sympathetic to conservative groups. As mentioned earlier, religious groups fall into the "Protected Class" defined in the law, so there is not much controversy about the CFPB's legal intervention in the financial exclusion of religious groups. However, we have not seen the CFPB take similar actions against non-protected classes (such as ordinary conservatives, or industries like cryptocurrencies), which will be explored in detail in the next section. Nevertheless, this move is undoubtedly a step in the right direction.
CFPB Actions
Recently, the CFPB finalized a new rule that brings digital wallets and payment applications under its regulatory scope and treats them as bank-like institutions. Under this rule, large digital payment platforms including Cash App, PayPal, Apple Pay, and Google Wallet need to provide transparent explanations for account closures. In the rule announcement, the CFPB explicitly mentioned the phenomenon of "debanking." However, it should be noted that this rule applies to "large technology companies" or peer-to-peer payment applications, not banks. There has not been any enforcement action against this rule yet, so we cannot judge its actual implementation effect.
So, will this rule be able to curb actions like Operation Choke Point 2.0? The answer is almost certainly no. First, this rule only targets the actions of technology companies, not banks. Second, Operation Choke Point-style actions are not autonomous decisions made by banks, but rather systemic pressure exerted by federal regulators on the entire industry through banks. If the CFPB noticed that, for example, cryptocurrency startups were being systematically cut off from banking services, they would have to confront the FDIC, the Federal Reserve (Fed), the OCC, and even the White House to end this practice. However, given Elizabeth Warren's strong opposition to cryptocurrency, one can't help but wonder whether the CFPB would take such action. More importantly, the fundamental problem with Operation Choke Point is that bank regulators overstepped their legal boundaries and tried to debank the entire industry, rather than the autonomous actions of individual banks (banks were just passively carrying out the orders of regulators).
In theory, if an industry (such as cryptocurrency) experiences systemic account closures, the CFPB has the authority to investigate under UDAAP. However, the recently introduced Payment Application Rule (which some critics of Marc Andreessen cite to justify the CFPB’s anti-debanking stance) does not apply to banks. In addition, the CFPB has yet to take substantive action on the issue of debanking in its actual enforcement actions.
About the CFPB’s Major Enforcement Actions
I did not find any settlements directly related to debanking in the CFPB’s enforcement records. Here are their top 30 settlements by dollar amount:
The most relevant case is the Citigroup case in 2023. At that time, they were found to have discriminated against Armenian Americans in credit card applications. According to Citigroup, this practice was due to the high fraud rate in the Armenian community in California (caused by fraud rings). In the end, Citigroup paid a fine of $25.9 million.
Another case is that of Townestone Financial in 2020. The CFPB found that the company discouraged African Americans from applying for mortgages in its marketing, and the company paid a $105,000 fine.
It is important to note that nationality and race are protected categories defined in U.S. law, so these cases do not involve purely political redlining. This is fundamentally different from critics’ accusations of de-banking the cryptocurrency industry.
Additionally, I looked at the most recent 50 CFPB settlements since March 2016 and found no cases involving deprivation of banking services for arbitrary reasons. Of those 50, 15 involved UDAAP violations (like the famous Wells Fargo case), 8 involved fair lending violations, 5 involved student loan servicing, 5 involved credit report inaccuracies, 5 involved mortgage servicing, 4 involved auto loan discrimination, and 3 involved illegal overdraft practices. As for debanking: none.
On Marc’s criticism of crypto/fintech companies and conservatives being debanked
On this issue, the situation is very clear. I have documented in detail the phenomenon of what I call Operation Choke Point 2.0. This practice originated under the Obama administration and has resurfaced under the Biden administration. In 2013, Obama’s Department of Justice (DoJ) launched Operation Choke Point, an official program to target legal but politically unpopular industries such as payday lending, medical marijuana, the adult industry, and gun manufacturers through the banking industry. Iain Murray discusses this in detail in his article (Operation Choke Point: What It Is and Why It Matters).
During the Obama administration, the FDIC, under the leadership of Marty Gruenberg, used hints and threats to persuade banks to "derisk" companies in more than a dozen industries. This practice triggered a strong protest from conservatives and was exposed by members of the House of Representatives led by Luetkemeyer. Critics believe that this secret regulation through "persuasion" is unconstitutional because it has not been through the formal rulemaking or legislative process.
In 2014, a Justice Department memo about the practice was leaked, and the House Oversight and Government Reform Committee subsequently issued a critical report. The FDIC subsequently issued new guidance requiring banks to assess risk on a case-by-case basis rather than "redlining" the entire industry. In August 2017, the Trump administration's Justice Department officially ended the practice. In 2020, Trump's Comptroller of the Currency, Brian Brooks, issued the "Fair Access" rule aimed at ending de-banking based on reputational risk.
However, in May 2021, Biden’s acting Comptroller of the Currency, Michael Hsu, rescinded the rule. In early 2023, after the FTX crash, crypto industry insiders, including myself, noticed that similar “stranglehold” tactics were being implemented against cryptocurrency founders and companies. In March 2023, I published an article (Stranglehold 2.0 is Underway and Crypto is Targeted), and a follow-up article in May revealed more new developments.
Specifically, I discovered that the FDIC and other financial regulators secretly imposed a "15% deposit cap" policy on banks for cryptocurrency-related companies. This means that banks cannot receive more than 15% of their total deposits from crypto-related companies. In addition, I believe that the two banks in the crypto industry, Silvergate and Signature, did not fail due to market reasons, but were forced to liquidate or close due to the government's hostile attitude towards the crypto industry.
Since then, cryptocurrency companies have continued to face great difficulty in obtaining banking services - despite the fact that there is no public regulation or legislation that explicitly requires banks to restrict services to crypto businesses. Law firm Cooper and Kirk pointed out that the practice of "Choke Point 2.0" is unconstitutional.
Recently, I reinvestigated this phenomenon and found new evidence that Silvergate Bank did not fail naturally but was "deliberately executed."
(See tweet for details)
Currently, this "15% deposit cap" policy for cryptocurrency banks still exists, which severely restricts the development of the industry. Almost all crypto entrepreneurs in the United States have been affected by this - I can confirm that about 80 crypto companies we have invested in have faced similar problems. Even my company Castle Island (a venture capital fund that only invests in fiat-related businesses) has experienced bank accounts being suddenly closed.
After Marc was a guest on the Rogan show, many crypto industry executives also shared their experiences. David Marcus revealed that Facebook's Libra project was forced to terminate due to Janet Yellen's intervention. Kraken CEO Jesse Powell, Joey Krug, Gemini CEO Cameron Winklevoss, Visa's Terry Angelos, and Coinfund's Jake Brukhman have also said that their companies have encountered serious obstacles in banking services. Caitlin Long has long publicly opposed "Operation Stranglehold 2.0" and even founded her own bank, Custodia, but Custodia Bank was deprived of its master account qualifications by the Federal Reserve and could not operate normally.
While critics may lack sympathy for the crypto industry, it must be acknowledged that crypto is a perfectly legal industry that has been suppressed by secret directives and innuendos from banking regulators, not through legislation or public rulemaking, but rather by administrative agencies operating behind the scenes, bypassing the democratic process.
It's not just the crypto industry, fintech companies are facing similar difficulties. According to research by the Klaros Group, since the beginning of 2023, a quarter of the FDIC's enforcement actions have been against banks that work with fintech companies, while non-fintech partner banks account for only 1.8%. As an investor in the fintech space, I can personally attest that fintech companies have encountered great difficulties in finding banking partners, which is almost comparable to the challenges that crypto companies face in obtaining banking services.
The Wall Street Journal criticized the FDIC’s action, noting that the agency “effectively engaged in rulemaking without the notice and public comment required by the (Administrative Procedure Act).” This behavior not only caused substantial harm to the industry, but also raised widespread questions about its legality.
Andreessen’s mention of conservatives being debanked is backed up by plenty of examples. For example, Melania Trump mentioned in her recent memoir that she had her bank account cancelled. Gab.ai, a right-wing speech platform, has also encountered similar problems. In 2021, General Michael Flynn had his account closed by JPMorgan Chase because he was considered a “reputational risk.” In 2020, Bank of America closed the account of Christian nonprofit Timothy Two Project International and froze the account of Christian pastor Lance Wallnau in 2023. In the UK, Nigel Farage was debanked by Coutts/NatWest, which even caused a small public opinion storm. These are just some of the many cases.
Under current law, U.S. banks have the power to close accounts for any reason, without providing explanation to customers. So, in essence, Andreessen is right: Debanking is real and far-reaching.
Controversy over the term “de-banking”
Critics believe that Andreessen is trying to use the concept of "de-banking" to promote his own economic agenda. Some point out that his motivation for focusing on this issue is to reduce regulatory pressure on the cryptocurrency and fintech industries. Lee Fang mentioned:
“Debanking is indeed an important issue. We’ve seen truckers opposing COVID-19 vaccine mandates lose their bank accounts as a result of their activities, and pro-Palestinian groups lose access to payment platforms like Venmo. But now, some predatory lenders and scammers are conflating consumer protection with ‘debanking’ as a call for deregulation.”
Additionally, the Axios author suggests that Andreessen’s focus on the Consumer Financial Protection Bureau (CFPB) may be related to his company’s investments in some controversial new banks, such as Synapse, which collapsed earlier this year. This criticism argues that Andreessen’s focus on “de-banking” is intended to advance the interests of the cryptocurrency and fintech industries while circumventing CFPB’s oversight of consumer protection.
While the critics’ arguments sound logical, the reality is more complicated. Historically, the Obama administration did develop strategies to use banking regulation to suppress certain industries, such as gun manufacturing and payday lending, which were considered unconstitutional. The Biden administration has further refined these strategies and effectively used them to suppress the cryptocurrency industry. For example, by putting pressure on cooperative banks, the government indirectly restricted banking services for cryptocurrency companies. These practices were not implemented through legislation or public rulemaking, but were operated behind the scenes through administrative means, bypassing the democratic process.
Currently, this strategy is also beginning to target the fintech industry. According to research by the Klaros Group, since the beginning of 2023, a quarter of the FDIC's enforcement actions have been against banks that work with fintech companies, while the proportion of banks that do not work with fintech is only 1.8%. As an investor in the fintech field, I can personally feel that this approach has made it extremely difficult for fintech companies to find banking partners, almost as difficult as it is for cryptocurrency companies to obtain banking services.
These phenomena show that the power of administrative agencies has exceeded its boundaries and has had a serious impact on multiple legitimate industries. Both the cryptocurrency and fintech industries need more transparent and democratic regulatory methods, rather than relying on secret instructions and vague policy implementation. In the future, as regulatory policies are adjusted, these problems may be gradually exposed and corrected.
Whether or not commentators like Fang think that the Biden administration’s targeting of crypto companies for debanking undermines his moral critique of the debanking of more sympathetic groups is beside the point. The fact is that it is happening, it is debanking, and it is illegal. Likewise, whether or not Marc Andreessen’s criticism of the CFPB is financially motivated is beside the point. (To date, the CFPB has not taken enforcement action against any of the businesses in which Andreessen’s venture firm, a16z, has invested, according to my research.)
What matters is that bank regulators (not just the CFPB, but multiple agencies) did instrumentalize the financial system to achieve political ends. This behavior went far beyond the scope of executive authority and harassed legitimate industries. And the fact is that this overreach did occur.
Evaluating Andreessen’s Views on Rogan’s Show
Based on this comprehensive analysis, we can evaluate the arguments Andreessen presents point by point:
Debanking occurs when a person or business is deprived of banking services because they are in a politically unpopular industry or because they hold dissenting political views.
This definition is accurate. Importantly, the severity of debanking should not be altered by whether the victims meet certain criteria of sympathy.
The CFPB does often take a heavy-handed approach to fintech companies and banks, and its necessity is questionable.
But based on the information available, the CFPB is not the primary party responsible for "Operation Stranglehold 2.0." The more direct parties responsible are the FDIC, OCC, and the Federal Reserve, which have coordinated their actions with the Biden administration. Although the CFPB has recently made statements on the issue of debanking, it has not taken specific actions, so it has neither mitigated the problem nor is it the primary party responsible.
At its core, debanking is about regulators allowing banks to carry out financial repression, thereby shielding the government from direct responsibility.
This model is similar to the way big tech companies are used to censor dissidents. By having banks or fintech platforms deny service, “enemies of the regime” can be effectively suppressed while avoiding too much attention from the outside world.
The Obama administration’s “Operation Chokepoint” targeted some legal but unpopular industries, including marijuana companies, the adult industry, and gun stores and manufacturers.
That description is accurate. In fact, the movement began in the payday loan industry, but Andreessen doesn’t mention that.
The Biden administration’s debanking efforts have primarily targeted cryptocurrency and fintech companies, while also occasionally involving conservatives.
Both of these are true. We have more evidence of a coordinated crackdown on crypto, and less evidence of action against fintech, but the FDIC has applied indirect pressure through enforcement actions against partner banks. As for conservatives being de-banked, we have plenty of anecdotal evidence, but no internal bank policies that explicitly target conservatives. Such actions are usually decided on a case-by-case basis, with “reputational risk” as the reason. At the end of the day, banks are completely black boxes and don’t have to make a case for reducing risk to individuals or companies.
a16z portfolio founders are being de-banked
Based on the available information, it is entirely possible, even very likely, that the 30 tech founders in the a16z portfolio are debanked. As an active cryptocurrency investment institution, many of a16z’s investment projects involve cryptocurrencies, and almost all domestic cryptocurrency startups have faced banking service issues at some stage.
What was Marc's mistake?
· Marc exaggerated a bit when describing the role of the CFPB. The recent crackdown on the cryptocurrency and fintech industries was actually led more by regulators such as the FDIC, OCC, and the Federal Reserve than by the CFPB. However, Marc did mention some unspecified "agencies" involved in debanking on the show, although he did not specifically mention the FDIC, OCC, or the Federal Reserve. In addition, the influence of Elizabeth Warren, the founder of the CFPB, on this matter cannot be ignored. She was one of the main drivers of "Operation Stifle 2.0", especially her appointment Bharat Ramamurti, who led the relevant actions in the National Economic Council of the Biden administration. Therefore, it is understandable that Marc magnified the responsibility of the CFPB.
· Marc’s discussion of PEPs is a bit one-sided. Being classified as a politically exposed person does not directly lead to bank accounts being closed, but it does increase the due diligence requirements of banks on these customers. Marc may have been inspired by Nigel Farage’s debanking by Coutts. In that case, Nigel was considered a PEP, which was indeed a contributing factor, but not the only reason.
Despite some minor details, Marc's main point is correct, and the critics' rebuttals are untenable. The CFPB has not yet become an effective anti-debanking force, but debanking does exist and has a particularly significant impact 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 mechanism of debanking.
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