Recent reports have raised alarms about banking access for over 30 founders in the technology and cryptocurrency sectors across the United States. Many insiders refer to this troubling phenomenon as “Operation Chokepoint 2.0,” viewing it as a strategic effort aimed at certain political opponents and less mainstream tech startups.
Elon Musk and Industry Reactions
Elon Musk, the billionaire behind Tesla, highlighted this issue in a post on X (previously known as Twitter) on November 27. He shared insights from a recent episode of the Joe Rogan Experience, where Marc Andreessen, the co-founder of Andreessen Horowitz, discussed a disturbing trend. Andreessen pointed out that tech entrepreneurs have been systematically denied banking services over the past four years, interpreting these developments as part of a larger political game.
Reflecting this sentiment, Brian Armstrong, Coinbase’s co-founder and CEO, criticized the Biden administration for what he described as unethical actions affecting banking access. He revealed on X that Coinbase is pursuing Freedom of Information Act requests to identify individuals involved in this alleged debanking campaign.
Banking Sector Challenges
These allegations surfaced in the wake of the troubling collapses of various crypto-friendly banks throughout 2023, which fueled suspicions regarding Operation Chokepoint 2.0. Critics, including venture capitalist Nic Carter, have labeled these bank failures as a government-driven strategy to pressure financial institutions into cutting ties with cryptocurrency businesses.
While the legitimacy of Operation Chokepoint 2.0 remains uncertain, numerous industry insiders have reported significant obstacles when trying to secure banking services. For instance, Sam Kazemian, founder of Frax Finance, recounted his dealings with JPMorgan Chase, where bank representatives stated they would need to close accounts linked to clients earning primarily from cryptocurrency. They attributed this decision to directives from the bank’s CEO.
Future Implications
The U.S. banking sector has faced considerable upheaval following the unexpected downfall of Silicon Valley Bank and Silvergate Bank, the latter entering voluntary liquidation. Shortly after Silvergate’s closure, Signature Bank halted its operations on March 12 as mandated by New York regulators. Nic Carter viewed the downfall of these three banks as indicative of Operation Chokepoint 2.0, suggesting a coordinated initiative to restrict banking access for the cryptocurrency industry.
Amid these ongoing challenges, Marc Andreessen shared with Joe Rogan that his concerns about the current landscape prompted him to support Donald Trump in the upcoming U.S. presidential election. He warned about the risks entrepreneurs face, such as potential sanctions or government exclusion without proper due process. Andreessen underscored the need to safeguard legitimate business activities. Many within the cryptocurrency community believe that a Trump win could usher in regulatory and economic improvements. This perspective is reflected in the recent spike in demand for leveraged Ether exchange-traded funds since the election, hinting at a potential rise in Ether’s market value.
Source: Cointelegraph
