Crypto industry leaders are intensifying their fight against alleged debanking practices, which they claim have targeted digital asset firms under the Biden administration.
At a recent Senate hearing, executives, including Nathan McCauley, CEO of Anchorage Digital, testified about their struggles.
McCauley shared with CNBC in an interview how his company, after years of banking relationships, suddenly had its account cut off with no warning or explanation in 2023, an experience echoed by other crypto firms facing similar challenges.
The industry has dubbed this alleged campaign “Operation Choke Point 2.0,” likening it to a prior Obama-era initiative that targeted banks associated with gun manufacturers and payday lenders, CNBC adds.
This time, however, the focus is on the crypto industry, with claims that U.S. regulators are pressuring financial institutions to sever ties with digital asset firms.
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Crypto executives have now found allies in Washington, especially among Republicans, who are now advocating for investigations into these debanking efforts.
Donald Trump has seized on the issue for political gain, claiming that banks like JP Morgan Chase & Co. (NYSE:JPM) and Bank of America Corporation (NYSE:BAC) have been politically motivated to debank conservative-aligned clients under regulatory pressure, CNBC adds.
Although banks have denied these claims, Trump’s rhetoric is gaining traction.
In Washington, Republicans like Sen. Rick Scott are voicing concerns over how financial institutions have cut off services to crypto businesses and conservative figures.
Meanwhile, McCauley highlighted the negative impacts on smaller crypto startups, forcing Anchorage to lay off 20% of its workforce and making it difficult for clients to send wire transfers.
The crypto industry has used its political influence to push back, with significant donations to pro-crypto PACs.
Trump’s executive order on crypto promises fair access to financial services, and the SEC is rolling back regulations that hinder banks from working with digital asset firms.
Additionally, the FDIC has faced pressure to revise its guidelines on crypto.
Recent high-profile incidents, like the forced closures of Silvergate and Signature Banks in 2023, have fueled concerns.
Signature Bank, particularly, was seen as sending an anti-crypto message, a sentiment shared by former Congressman Barney Frank.
With increasing influence, the crypto industry is navigating a shift in Washington, aligning itself with Trump and key figures like Elon Musk to push for more favorable conditions.
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