Crypto, Trump, GOP Leadership Gangs Up with FDIC over Debanking

Anchorage Digital CEO Nathan McCauley hopes everyone knows what happened to his crypto company during the Biden administration in 2023.

“Our story is pretty ridiculous,” Macauley told CNBC in an interview after testifying at a Senate hearing earlier this month titled “Investigating the Real Impact of Demanking in America.” “We had a bank that has grown over the years, over the years when we decided to turn off our bank accounts, essentially using DIME.”

No explanation. No warning. After working with the bank for two years, access was cut off. He didn’t name the bank, and an Anchorage spokesman said the company refused to provide it.

McCauley’s peers across the Crypto industry have been locked out of the US financial system, lost access to pay, and share similar sagas about checking accounts, payment processing. Industry leaders call it “Choke Point 2.0 Operation.” This has put the coordinated efforts by regulators during President Biden to put pressure on banks to cut ties with crypto. The 1.0 version says it came when the Obama administration chased after a bank that supported gun manufacturers and payday lenders.

With the word “Debanking,” Crypto executives and investors instantly found an alliance between Republicans in both Congressional homes and in the White House.

President Donald Trump has worked together on the agenda for political interests. He denounced at the World Economic Forum in Davos, Switzerland last month. jpmorgan chain and Bank of America The politically motivated ban bullet claims that major financial institutions have shut down conservatives under pressure from regulators. The bank has denied the claim, and Trump has not provided any evidence to back it up.

Sen. Rick Scott (R-FLA.) is closely associated with Trump, and as chairman of the Senate Banking Committee, he used his opening remarks at the February 5 hearing to show the president’s sentiment. It has been reflected.

“It’s so surprising and discouraging to hear that financial institutions are cutting off services to digital asset businesses, politicians, conservative businesses and individuals,” Scott said. Ta.

For crypto industry leaders like McAuley, Republican leaders in Washington provided a platform to publicly broadcast their complaints.

McAuley, the company’s federally chartered crypto bank, spoke about Anchorage’s sudden loss of banking services in June 2023. He said his company faces many challenges, but the environment is getting worse for less established startups.

“I can only imagine what’s going on with small entrepreneurs who didn’t have the resources they could put into their original purpose in order to keep their bank accounts open,” McCauley told CNBC.

In testimony to Scott’s committee, McAuley said after losing access to banking services, Anchorage must fire 20% of its workforce, including 70 US employees. To this day, clients “cannot send wire transfers to third parties,” he said.

The early, prominent hearings of Trump’s second administration underscore the sudden impact of the crypto industry that will help attract candidates selected nationwide in November.

Cryptocurrency exchange Coinbase He was one of the top corporate donors in the 2024 election cycle, giving over $75 million to Fairshake and its affiliate PAC. Ripple has given up about $50 million.

Coinbase and Ripple were involved in a long-term legal battle with the SEC under former chairman Gary Gensler.

Trump pays them back in a number of ways.

His executive order on Crypto promises “fair and open access” to financial services. And Trump has appointed venture capitalist David Sacks, a longtime ally of Elon Musk, as the White House’s first AI and Crypto Czar.

Meanwhile, the SEC already shows a rollback of rules that banks have not kept Bitcoin On their balance sheet, FDIC is under pressure to revise guidelines, making it difficult for banks to serve digital asset companies.

Coinbase Chief Legal Officer Paul Grewal testified before the House Financial Services Committee on February 6th. Mala Holdings. At a hearing entitled “Operation Chalk Point 2.0: Efforts to Put Biden Administration’s Codes on the Cross,” they explained positive pressure from US regulators, and banks cut ties with crypto companies. I explained how to push effectively as

“No one wants to see anyone rejecting basic banking services based on political views. “There are concerns in the political aisles and the whole of Congress, and banking services have been weaponized in the past, and It is weaponized to roughly run people who may not be good.”

Last week, FDIC released hundreds of pages of internal records obtained through Freedom of Information Act (FOIA) requests. The document shows that regulators sent a “suspension letter” and encouraged banks to rethink their relationship with crypto clients.

Nick Carter, founder of Castle Island Ventures, spent several months recording revelations in his chokepoint investigation. He said the FDIC records show that banks are under pressure to avoid crypto clients, even in the absence of clear law.

“In the end, smoking guns are a communication between the regulator and the bank itself,” Carter said.

As part of that investigation, the House committee is investigating allegations that bank executives and financial regulators secretly blacklisted crypto companies.

In his testimony, Thiel said, “discriminatory banking and monetary policy threatens the digital asset ecosystem” and “banks and payment processors effectively determine which industries exist and can grow within the US economy. “It’s.”

Among the chokepoint incidents that almost captured the outrage of Crypto investors was the forced closure of Silvergate Bank and Signature Bank in 2023, following the 2023 meltdown at Sam Bankman Fried’s FTX. Silvergate and Signature were the leading banks of FDIC insurance for crypto companies.

Silvergate Capital, the bank’s parent, last year approved a bankruptcy filing for a “rapid contraction” in its IT business in early 2023, but it “stabilizes” and “meets regulatory capital requirements.” He said he could. The ability to continue to serve our customers. ”

Silivergate believes its bankruptcy stems from “increased supervisory pressure on Silvergate and other banks focusing on the services of its crypto asset business.”

The signing bank was seized by regulators in March 2023. Bernie Frank, a former Democrat who is a member of the Signing Board, claimed that the FDIC specifically shut down “to send a very strong anti-crypto message.” FDIC will arrange for the sale of signature assets, excluding $4 billion in crypto deposits.

“The federal government denigrates cryptocurrency and legally suspicious policies,” Mike Lenpress, chairman of Silvergate and previously spent two years as Coinbase law chief, said in an opinion piece in the Wall Street Journal this week. After using it, it writes that it is finally changing courses. Forces businesses to succumb to their will.”

The entire crypto industry is gathering that message, but much of the Congress focuses on the claim that banks are targeting conservatives for political views. Carter said lawmakers are trying to reach a larger audience because “most people don’t care about codes.”

“I think this was a political choice made by the administration that took place after they left the people in Congress, but it was about working on something conservative too,” Carter said. “So it became a problem with a much broader appeal.”

For Trump, he can earn more than just political points. Potentially a lot of money is involved.

Before he took office, Trump and first lady Melania Trump already immediately put billions of dollars in paper value to his family’s net worth, along with the tens of millions of dollars earned by projects earned in trading fees. I had already launched the added meme coins.

A week after his term, Trump launched Truth.fi, the financial arm of Trump Media, to promise ETFs, Cryptocurrency Investments, and “Patriot Economy” assets.

Musk, meanwhile, is at the heart of the Trump administration and is working on his own projects. He has placed the social media platform X as an alternative online bank, allowing users to move funds between traditional bank accounts and digital wallets for immediate peer-to-peer payments.

A good atmosphere is expressed throughout the industry.

“This is a brand new day for American cryptography,” says David Marcus, former director of Crypto. Meta In an interview with CNBC’s “Squawk Box” last week, he was the current CEO of infrastructure startup Lightspark. What’s going on under Trump is “a rather polar reversal of atmosphere and energy for our industry as a whole.”

Watch: David Marcus, CEO of the New Era of Crypto