Written by: Nic Carter
Compiled by: Block unicorn
This week, venture capitalist Marc Andreessen appeared on Joe Rogan’s podcast and made some explosive claims, claiming that there is a systematic “debanking” of politically unpopular companies and individuals, especially in the crypto industry. At the beginning of the video, he pointed to the Consumer Financial Protection Bureau (CFPB), which was created by Elizabeth Warren, as the culprit for crypto startups being debanked. However, some critics countered that not only is this “debanking” not happening, but the CFPB’s actual goal is to end it.
The problem is that there are several different issues to discuss here. First, what is Marc Andreessen complaining about, and are his concerns justified? Second, what role, if any, has the CFPB played in the process of debanking—is it an instigator or a curber?
Many on the left are not aware of the crypto industry and the right’s general concerns about debanking, and so are confused or unconvinced by Mark’s comments and Elon’s reposts on social platform X. First, I think it’s worth reading Mark and Joe’s conversation in full, as many people are reacting based on snippets only, and this is actually an in-depth review that includes many independent points. Next, let’s dig in.
What is Marc Andreessen complaining about?
Mark made a number of clear and interrelated points during his show. He began by criticizing the Consumer Financial Protection Bureau (CFPB), arguing that it is an “independent” federal agency with little oversight that is able to “intimidate financial institutions and block new competition and new startups that are trying to compete with the big banks.”
He then mentioned debanking as a specific harm, which he defined as “when you as an individual or your company is completely removed from the banking system.” Mark noted that this phenomenon occurs through banks as agents (similar to government censorship through big tech companies), but in an indirect way that insulates governments from direct responsibility.
According to Mark, debanking “has been happening to all crypto entrepreneurs for the last four years. It’s also happening to a lot of fintech entrepreneurs, and anyone trying to start any new banking service, because they (the government) try to protect the big banks.” Mark mentioned politically unpopular businesses — legal marijuana, escort businesses, and gun stores and manufacturing during the Obama administration. This was called Operation Choke Point (proposed by the Obama administration’s Justice Department). Operation Choke Point 2.0 (named by the crypto industry) targets “political enemies” of the government and “unpopular tech startups.” Mark added, “It’s had a huge impact on the tech space. We’ve had about 30 founders go bankrupt in the last four years.”
The victims “basically all crypto founders, every crypto startup, have either been debanked by individuals and forced out of the industry, or their companies have been debanked and can no longer operate, or they’ve been sued by the SEC or threatened with charges.”
Mark also mentioned that he knew of some people who had their banking services cancelled for "holding incorrect political views or making unacceptable remarks."
To summarize, Mark makes the following claims:
Debanking means that a person or company is deprived of banking services, either because your industry is politically unpopular or because you hold a different political opinion.
The CFPB bears at least some responsibility, as do other unnamed federal agencies
This was achieved by having regulators outsource financial repression to banks, which insulated the government from direct responsibility.
The main victims of debanking during the Obama administration were legal but unpopular industries—marijuana companies, adult businesses, gun stores, and gun manufacturers.
Crypto companies and entrepreneurs, as well as fintech companies, are the main victims of debanking under the Biden administration. Conservatives are also sometimes debanked simply because of their political views
30 tech entrepreneurs in the a16z portfolio experienced debanking.
We will evaluate these viewpoints at the end of the article.
What do critics think of Marc Andreessen's comments?
I’m simplifying, but left-liberals are upset with Marc Andreessen’s comments because they think he’s using the narrative of debanking to suit his own ends (supporting cryptocurrencies and fintech) while ignoring the more “legitimate” victims of debanking — like Palestinians being kicked off Gofundme for funding Gaza. As for the mainstream left, they’re usually outright supporters of debanking their political enemies, so they’d rather ignore the whole thing.
But there is a segment of the left that is at least ideologically consistent and skeptical of corporate and state power over speech and finance. (Now that the right has retaken some tech platforms and regained state power, this segment may be growing). They have been fighting against debanking. They recognize that while right-wing dissidents have been the primary victims of debanking (think Kanye, Alex Jones, Nick Fuentes, etc.), the left could just as easily have suffered if the situation was reversed. They define debanking more narrowly: “Debanking, or as some financial institutions prefer to say, de-risking, is when a bank cuts ties with customers who are deemed politically incorrect, extreme, dangerous, or out of bounds.” (From this TFP article). Supa Subramanya mentions in this article that banks have the power to completely ruin a person’s financial life if they deem that person a reputational risk and unable to do business. Individuals on both the left and the right have been affected — Melania Trump, Mike Lindell, Trump himself, Christian charities, participants in January 6th, Muslim crowdfunding organizations and charities, etc.
Yet many on the left remain critical or confused by Anderson’s comments, especially about the Consumer Financial Protection Bureau. Here are a few examples:
Lee Fang: The CFPB has been strongly against de-banking. Why does Anderson say that? Where is the evidence? One point that is not mentioned in this long article is that the CFPB has investigated whether the startups supported by Anderson are suspected of fraud, not political speech. De-banking comes from the FBI and the Department of Homeland Security (DHS), not the CFPB.
Lee Fang: Debanking is indeed a big problem. We have seen truck drivers who oppose mandatory vaccines lose their bank accounts due to protests, pro-Palestinian organizations lose access to Venmo accounts, and so on. But now, predatory lenders and scammers are conflating consumer protection with "debanking" and calling for deregulation.
Jarod Facundo: I really don't understand what @pmarca is talking about because just a few months ago at a FedSoc event, CFPB Director Chopra warned the audience that there was a "de-banking" of Wall Street going on, without giving any explanation.
Jon Schweppe: I agree with @dorajfacundo. Have no idea what @pmarca is talking about. The CFPB has been leading the fight against discriminatory debanking. What does that mean?
Ryan Grim: The CFPB issued a good, legal rule targeting banks for de-banking people based on their political views. Yes, a populist, left-wing CFPB head stood up for conservative rights. Now, venture capitalists and Musk, who don’t like the CFPB for other reasons, are lying, stirring up emotions, and undermining the CFPB.
In general, this group is hostile to cryptocurrencies and fintech, and does not consider companies in these industries to be victims of "debanking," at least not morally equivalent to crowdfunding platforms that send money to Gaza. According to left-wing libertarians, cryptocurrency practitioners "have it to themselves." They believe that cryptocurrency practitioners issue tokens, scam and commit fraud, so they should be despised by banks. "If cryptocurrency founders are debanked, that is a problem for bank regulation, not our battle."
Moreover, according to these critics, Mark’s mistake was to pin the blame on the CFPB. The CFPB, they tell us, is an agency that fights “debanking.” Mark is only upset with the CFPB because he invests in fintech platforms and the CFPB is responsible for making sure they don’t defraud customers.
Since Mark’s appearance on the Rogan show, dozens of tech and crypto founders have spoken out about their experiences of being unilaterally deprived of bank access. Many in the crypto industry see light at the end of the tunnel and believe that the unconstitutional assault on the crypto space by banking regulators through the banks is nearing its end. Calls for an investigation into “Operation Stranglehold 2.0” are growing louder. So who is right? Anderson or his critics? Is the CFPB really guilty? Is debanking as serious as Mark claims? Let’s start with the CFPB.
What is the CFPB?
The Consumer Financial Protection Bureau (CFPB) is an "independent" agency established in 2011 by the Dodd-Frank Act in the aftermath of the financial crisis. It has broad authority and is authorized to oversee banks, credit card companies, fintech companies, loan sharks, debt collectors, and student loan companies. As an independent agency, it is funded outside of Congress (and therefore not subject to congressional funding scrutiny). The president cannot easily remove the director, it can directly make rules, and it can bring enforcement and legal actions in its own name. It has considerable power. The CFPB was essentially created at the sole request of Senator Elizabeth Warren.
The CFPB is often targeted by conservatives and libertarians because it is yet another federal agency, and a largely unaccountable one at that. It was set up by Elizabeth Warren, who is often targeted by the right, to effectively harass fintech companies and banks. Of course, most of these companies are already heavily regulated. Banks must be subject to state or federal (OCC) oversight, and if they are public companies, they must also answer to the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve, and the Securities and Exchange Commission. Credit unions, mortgage lenders, etc. all have their own regulators. It was not that federal financial regulation was seriously lacking before the CFPB was created. The United States has more financial regulators than any other country in the world. So it is understandable that conservatives would question why Elizabeth Warren, who seems to be motivated by pure revenge, was able to obtain such a captive agency that she can use at will to harass political opponents.
Now let’s talk about the CFPB’s responsibilities.
As for the CFPB's role, it does have some specific regulations that generally oppose discrimination in banking access. In particular, the Equal Credit Opportunity Act (ECOA) and the "fraudulent, unfair, or abusive practices" section (UDAAP) of the Dodd-Frank Act are the relevant legal frameworks. ECOA prohibits discrimination based on certain protected categories, including race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.
In terms of the “killing operations” issue that Marc Anderson mentioned, these regulations do not apply. “Cryptopreneurs” or “conservatives” are not protected classes under the law. Therefore, this part of the CFPB’s functions does not theoretically address the issues we are discussing: the politically targeted suppression of specific unpopular industries. Moreover, this regulation applies to credit access, not banking in general.
The UDAAP portion of the (Dodd-Frank Act) is another piece of legislation that could be relevant to disbanking. It gives the CFPB broad authority to pursue practices they deem to be unfair, deceptive, or abusive. The huge settlement they reached with Wells Fargo was under UDAAP. In theory, if the CFPB was going to take action against disbanking, they would do so under UDAAP. But so far, they have been more talk than action.
What the CFPB is doing
Recently, the CFPB finalized a rule that brings digital wallets and payment apps under its regulatory scope, making them more like banks. This rule requires large digital payment apps, such as Cash App, PayPal, Apple Pay, and Google Wallet, to provide transparent explanations for account closures. They specifically mentioned "debanking" in the rule release. Keep in mind that this rule does not apply to banks, but to "big tech companies" or p2p payment apps. Anyway, as of now, this rule has not been actually implemented, so we still need to observe its specific implementation in the real world.
Will this rule inhibit something like "Stranglehold 2.0"? Very unlikely. First, it covers the actions of tech companies, not banks. Second, stranglehold-style actions are not optional actions at the bank level, but rather the result of federal regulators clamping down on entire industries through the banks. For example, if the CFPB noticed that cryptocurrency startups were being systematically cut off from banking, they would have to fight the FDIC, the Federal Reserve, and the Office of the Comptroller of the Currency (OCC) (and ultimately the White House) to end the practice. Given Elizabeth Warren's staunch anti-crypto sentiment, one can't help but wonder if the CFPB would do so. More importantly, the problem with strangleholds has to do with bank regulators overstepping the legal boundaries to debank entire industries. It has nothing to do with the malfeasance of individual banks (which are simply reluctantly carrying out the regulators' orders).
Under UDAAP, the CFPB could theoretically review systemic account closures targeting an industry, such as cryptocurrency. But the recent payment app rulemaking does not apply to banks, and some Marc Andreessen critics cite this rule as evidence of the CFPB’s opposition to unbanking. Moreover, the CFPB has so far been silent on unbanking in its actual enforcement actions.
What are the main enforcement areas of the CFPB?
I did not find any CFPB settlements related to debanking. Here are the 30 largest CFPB settlements, sorted by dollar amount:
The closest or related case I could find was the 2023 Citibank case, which revealed that they discriminated against Armenian Americans in credit card applications. (The bank ostensibly did this because the Armenian community in California saw higher fraud rates, primarily due to fraud rings). Citibank paid a $25.9 million fine for this.
In 2020, the CFPB found that Townestone Financial discouraged African Americans from applying for mortgages in its marketing. The company paid a $105,000 fine.
Both nationality and race are considered protected groups under U.S. law, so neither case falls under purely political red lines, as critics of crypto’s unbanking have complained.
Additionally, I looked at the 50 most recent CFPB settlements since March 2016, and none of them involved arbitrary deprivation of access to banking services. Of the 50 most recent 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. Debanking: None.
Is there any substance to Mark’s critique of crypto/fintech companies and the debanking of conservatives?
There is no real ambiguity on this point. I have documented in detail the phenomenon known as Operation Stranglehold 2.0, where the Biden administration has revived the practice of financial redlining begun by the Obama administration, which began around 2013. At the time, Obama’s Justice Department launched Operation Stranglehold, an official DOJ program to target legal but politically unpopular industries such as loan sharks, marijuana, adult-use, and gun manufacturers through the banking industry. Iain Murray’s article (Operation Stranglehold: What It Is and Why It Matters) has a good discussion of this. Under Marty Gruenberg’s leadership, Obama’s Federal Deposit Insurance Corporation (FDIC) used innuendo and threats to convince banks to “de-risk” companies in more than a dozen industries. Conservatives were unhappy with this, and members of the House of Representatives led by Representative Luetkemeyer exposed the practice. Critics argued that the practice was unconstitutional because it involved covert regulation through persuasion, rather than official rulemaking or legislation.
In 2014, a DOJ memo on the practice was leaked, and the House Oversight and Government Reform Committee released a key staff memo on the practice. The FDIC issued new guidance to banks, encouraging them to assess risk on a case-by-case basis rather than redlining the industry as a whole. In August 2017, Trump’s Justice Department officially ended the practice. In 2020, Trump’s Comptroller General Brian Brooks issued a “fair access” rule designed to end debanking based on reputational risk.
However, in May 2021, Biden’s Acting Comptroller Michael Hsu rescinded the rule. In early 2023, after the FTX crash, people in the crypto industry, including myself, noticed that similar strangulation tactics were being used against crypto founders and companies. In March 2023, I published (Strangulation 2.0 is Underway and Crypto is Being Targeted), followed by another article in May detailing the new findings.
Specifically, I discovered that the Federal Deposit Insurance Corporation (FDIC) and other financial regulators had secretly placed a 15% cap on bank deposits for crypto-related companies. Furthermore, I argued that the crypto-focused Silvergate and Signature banks were unjustly forced into bankruptcy or closure due to the government’s anti-crypto sentiment. Since then, crypto companies have struggled to obtain banking services — despite the fact that there are no official public regulations mandating that banks restrict banking operations to crypto companies, nor any legislation to that effect. Law firm Cooper and Kirk has again accused Operation Strangler 2.0 of being unconstitutional.
Recently, as the cryptocurrency industry remains shackled by this regulatory secrecy, I revisited this practice and found new evidence that Silvergate Bank was executed, rather than dying a natural death.
Today, crypto-focused banks still have a 15% deposit cap, which stifles the industry. Every US crypto entrepreneur has suffered from this — I can attest to the fact that it has happened to about 80 of our portfolio companies. My firm, Castle Island, a general venture capital fund that only handles fiat currencies, has also seen some of its bank accounts suddenly closed.
After Mark’s appearance on the Rogan show, many cryptocurrency executives also spoke out. David Marcus explained how the Facebook Libra project was killed by Janet Yellen. Kraken CEO Jesse Powell, Joey Krug, Gemini CEO Cameron Winklevoss, Visa’s Terry Angelos, and Coinfund’s Jake Brukhman also shared their stories. Caitlin Long has long been fighting against Operation Stranglehold 2.0, even starting her own bank, Custodia, which had its master account stripped by the Fed. Critics may not be sympathetic to the crypto industry, but the fact is that it is a perfectly legal industry that has been suppressed by secret letters and innuendos from banking regulators. As a result, the United States has launched a broad crackdown on crypto banking, an act that was not implemented through legislation or rulemaking in the democratic process, but rather entirely through administrative agencies.
Outside of crypto, similar actions against fintech are quietly underway. According to research from the Klaros Group, a quarter of FDIC enforcement actions since the beginning of 2023 have targeted banks that work with fintech companies (compared with only 1.8% of banks that do not work with fintechs). As an investor in the fintech space, I can attest that finding banking partners for fintech companies has become a huge challenge, comparable to the difficulties that cryptocurrency companies face in obtaining banking services. The Wall Street Journal criticized the constitutionality of the FDIC's actions, saying that the agency "is effectively conducting rulemaking while bypassing the notice and public comment period required by the (Administrative Procedure Act)."
As for Anderson’s comments about conservatives being disconnected from their bank accounts, we have ample anecdotal evidence that this is happening. Melania Trump mentioned in her recent memoir that she was disconnected from her bank account. The same happened to the right-wing speech platform Gab.ai. In 2021, JPMorgan Chase cancelled the bank account of General Michael Flynn, citing reputational risk. In 2020, Bank of America cancelled the account of the Christian nonprofit Timothy II International Project, and in 2023 froze the account of Christian missionary Lance Varnau. In the UK, Nigel Farage caused a minor scandal when his bank account was cancelled by Coutts/NatWest Bank. These are just a few examples among many. Under current law, Bank of America can close accounts for any reason, without giving an explanation. So, in essence, Anderson is correct.
Why do critics try to limit the discussion of “debanking”?
What the critics have in common is that Anderson has somehow co-opted the term “debanking” to advance his own economic agenda. Writer Lee Fang says:
“The issue of debanking is very serious. We’ve seen truckers opposing mandatory vaccines lose bank accounts for protesting, pro-Palestinian groups lose access to Venmo, and more. But now predatory lenders and scammers are conflating consumer protection with ‘debanking’ and calling for deregulation.”
The Axios author suggests that Anderson is concerned about the CFPB because his firm has invested in shady new banks like Synapse, which collapsed earlier this year. This has become a common theme in the comments that Anderson is only concerned with "de-banking" because he wants to deregulate the cryptocurrency and fintech industries and get rid of the CFPB's attempts to protect customers.
This rings true, so it resonates with a lot of people on the left who don’t want to believe that the government would unlawfully debank entire industries. Unfortunately for them, it does ring true. The Obama administration did develop strategies to use banking regulation to unconstitutionally crack down on industries like gun manufacturing and loan sharking. The Biden administration has refined those strategies again and used them very effectively against cryptocurrencies. They are now going after fintech companies by harassing their partner banks. These things do happen, and in both cases they are broad (and unconstitutional) overuses of executive power that will now be exposed and undone under Trump.
Whether or not a writer like Fang thinks the Biden administration’s strategy to deprive crypto companies of banking services mitigates his own moral arguments for debanking sympathetic groups is irrelevant. It happened, it’s debanking, and it’s illegal. Nor is it that Mark has some financial motivation to criticize the CFPB. (I checked, and the CFPB has not taken any enforcement actions against a16z’s investment companies to date). Bank regulators (Mark does mention multiple agencies, not just the CFPB) have indeed exploited the highly regulated financial system for political purposes. Whether or not the messenger’s motives are pure is irrelevant. What matters is whether federal agencies dangerously abused executive power and went far beyond their authority to harass a legitimate industry. In fact, they did.
The verdict on Anderson's charges
So, based on a thorough analysis, let’s evaluate Mark’s remarks at the Rogan conference:
Debanking means that a person or company is deprived of banking services, either because your industry is politically unpopular or because you hold a different political opinion.
In my opinion, this is an accurate description. Being "debanked" does not make any difference depending on whether the victim is sympathetic or not in your eyes.
The CFPB bears at least some responsibility, as do various other unnamed federal agencies
The CFPB does habitually harass fintechs and banks, and it probably doesn’t need to exist. But based on what we know about Operation Stranglehold 2.0, they don’t bear primary responsibility. More directly involved are the FDIC, the OCC, the Fed, and there is coordination from the Biden administration. Contrary to what critics say, the CFBP is not really a mitigation force, as they haven’t brought any cases against “debanking” so far, despite some recent noise about it.
The way de-banking works is for regulators to outsource financial repression to banks so that the government is not directly responsible
This is an accurate description. Just like using big tech to censor dissidents, using banks or fintech platforms to kick out tech founders is an effective way to financially silence enemies of the regime without drawing much scrutiny.
The main victims of debanking during the Obama administration were legal but unpopular industries—marijuana companies, adult-use stores, gun stores, and gun manufacturers.
This is an accurate description of how Operation Strangler (the official Obama-era DOJ program) worked. It actually started with loan sharking, but Mark doesn’t mention that.
Cryptocurrency companies and entrepreneurs, as well as fintech companies, are the main victims of bank decentralization under the Biden administration. Conservatives are also sometimes debanked because of their political views.
These claims are all true, though we have more evidence of a concerted crackdown on crypto than an anti-fintech movement (though we know the FDIC is holding fintechs accountable through enforcement actions against partner banks). Regarding the de-banking of conservatives, we have plenty of anecdotal evidence that this is happening, but no evidence that banks have an existing internal policy. This seems to be done on a case-by-case basis, with “reputational risk” as the reason. The bottom line is that banks are completely opaque and don’t need to provide justification for their decisions to de-risk.
30 tech founders in a16z portfolio were once unbanked
It is possible, and very likely. a16z is a very active cryptocurrency investment firm, and almost every domestic cryptocurrency startup has faced banking problems at some point.
Where did Marc go wrong?
What was Mark's mistake?
He overstates the role of the CFPB a bit, as their sister regulators the FDIC, OCC, and the Federal Reserve are more responsible for the recent spate of crackdowns on crypto and fintech companies. However, he does note that other unnamed “agencies” are behind debanking (though he doesn’t mention the FDIC, OCC, or Fed). Also, when it comes to the CFPB, Elizabeth Warren is the founder of the agency and she’s been the one most responsible for the strangulation efforts (especially under the Biden administration, where it’s led by her appointee to the National Economic Council, Bharat Ramamurthy). So I can understand Mark assigning a disproportionate amount of responsibility to the CFPB.
His discussion of Politically Exposed Persons (PEPs) is somewhat simplistic. Being classed as a PEP does not automatically result in a loss of banking services, but it will generally subject you to more due diligence. Mark may be referring to the Nigel Farage/Coutts/Natwest incident, when Nigel was considered a PEP and this was indeed a factor in his being de-banked by Coutts.
Overall, Mark is right and the critics are wrong. The CFPB has yet to become any kind of strong anti-debanking force. Debanking is real, it applies explicitly to crypto and fintech, and more evidence will emerge as Republican control arrives and investigations unfold.
