Just before Thanksgiving, Marc Andreessen, one of Silicon Valley’s most prominent venture capitalists, went on Joe Rogan’s podcast and explained, over the span of three hours, why he voted for Donald Trump. Andreessen covered a lot of territory — but there was one snippet of the show that got vastly more attention than any other: Andreessen spoke in some detail about a stealth government crackdown on the crypto industry that had played out during the Biden administration. Crypto founders and investors had been speculating and complaining about the existence of just such a crackdown since late 2022, shortly after FTX collapsed — but it was often regarded as a conspiracy theory, since there was no official, public-facing government plan along those lines. The nub of the accusation was that federal regulators across various agencies were conspiring to exclude any tech companies that dealt in crypto from the banking system — with the companies often unable to do business as a result. “We’ve had like 30 founders debanked in the last four years,” Andreessen said. “Basically, it’s a privatized sanctions regime that lets bureaucrats do to American citizens the same thing that we do to Iran: kick you out of the financial system.”
On social media — but particularly the X platform — the words landed like a nuclear bomb. Various posts of the clip have been viewed upward of 60 million times. For days on X and elsewhere, topic A in tech, finance, and crypto circles was unpacking and discussing Andreessen’s assertion. Related stories and anecdotes poured out. Former Facebook executive David Marcus took it as a prompt to finally reveal, after several years, how the government had used soft power to quash the company’s 2017 plan to launch a digital currency on the platform (first known as Libra, then Diem). He described how the government killed the project, claiming, “Jay Powell was told by Treasury secretary Janet Yellen at one of their biweekly meetings that allowing this project to move forward was ‘political suicide,’ and she would not have his back if he let it happen.” Among the many others who spoke up was Tyler Winklevoss, co-founder, with his twin brother, of the Gemini crypto exchange. “Yes. I was debanked because I’m in crypto, as was @Gemini,” he wrote. “The number is probably much larger than 30, thats just in the a16z portfolio alone. They also assassinated several banks because they banked crypto companies. Totally unlawful, evil behavior.”
The outrage reverberated beyond the crypto world into the larger spheres of tech and finance. The idea that the federal government had stealthily engineered a plan to deprive many founders — people either directly or tangentially associated with anything crypto — of financial services was offensive to entrepreneurs of all stripes, especially those in other politically controversial fields like AI. In the tech world, it wasn’t about crypto being a legally murky or sometimes-scammy industry — it was about the federal government using a heavy-handed, secretive tactic to deprive Americans of their rights.
A key piece of context: If the government did what Andreessen was alleging, it would not have been the first time. A similar plan by the federal government a decade ago, called Operation Choke Point, was deployed against payday lenders, gun-makers, and a few other disfavored industries. But the approach was successfully challenged in court: The government settled with the companies and admitted that it can’t just decide certain categories of businesses don’t deserve access to the banking system, or use threats and intimidation to get rid of them — as tempting as it might be in some cases.
And many people assumed the government had learned its lesson, which is why few outside of crypto believed it was happening again, until Andreessen’s comments. “In tech, it was kind of shocking, that the banks, or bank regulators, would disfavor a specific industry like that — I don’t think they realized the extent,” says Nic Carter, a venture capitalist credited with first proposing the theory that the government was using the banks to secretly crack down on crypto. “It feels very unjust. I think it’s a real violation of the fundamental setup of banking, and it turns them into arms of the state.” (In 2023, Carter dubbed the suspected scheme Operation Choke Point 2.0 — and the name stuck.)
“It’s in our view un-American and illegal, and it can happen to any industry. If you don’t like what someone has to say about you, you could cut off their access to banking,” says Nathan McCauley, the co-founder and CEO of crypto custodian Anchorage Digital, who testified about his own debanking experiences on Capitol Hill in early December.
But Andreessen did not provide any receipts and key questions have remained live in the wake of the Rogan clip: How true was it? Did the Biden administration resort to legally suspect means to thwart start ups and companies that in any way intersected with digital currencies? If so, what did the scheme look like? Who was responsible? Where’s the evidence?
Those questions are likely to play out in public view in the coming months, as a Republican-led Congress is taking them very seriously, and has already begun holding hearings on the matter. The House Financial Services Committee has asked all the regulatory agencies to turn over reams of documents, which the lawmakers are now going through as part of a bipartisan investigation into Operation Choke Point 2.0. “We’re looking for directed evidence where bank supervisors have, verbally or in writing, encouraged their banks to not do business with a company that in any other terms, legally, financially, stability wise, would be perfectly fine to have as a customer,” says Representative French Hill, the Arkansas Republican who is the new chair of the committee under Trump. “I think every American family and every American business that’s a legal business operating under the laws of their state in the U.S. should have the right to have a bank account.” Hill has already heard testimony from allegedly debanked entrepreneurs and has found it convincing enough to believe something similar to the original Operation Choke Point went on, and that there is a paper trail to prove it. “I bet there is,” he says.
It’s not just Republicans who think so: Hill claims that Representative Maxine Waters has pledged her support for the investigation, and Ritchie Torres, the New York Democrat who also sits on the committee, wrote on X that the “federal government’s unfettered powers of debanking represents an insidious threat to civil liberties in America.” (Neither Waters or Torres responded to requests for comment.)
On the flip side, there are plenty of people who think an Operation Choke Point 2.0, if it existed, was the right approach to take to crypto. An often-voiced view is that banks are well within their rights to off-board companies they believe are risky — and that if that ended up targeting crypto in the months after bitcoin exchange FTX was revealed to be a massive fraud (when regulators were warning loudly of the risks), it shouldn’t be a huge surprise to anyone. As more entrepreneurs came forward with their debanking stories after the Rogan episode, Annie Lowrey, the financial journalist, posted a link to a Financial Times article about a crypto money-laundering scheme, writing, “so uh stuff like this is why fintech founders with money in crypto keep getting debanked; hope that helps!”
But the companies targeted weren’t just one-off scams or questionable token peddlers, but also legal businesses with their own regulatory oversight like Anchorage, and sometimes even banks themselves. That includes Silvergate Bank, which was a go-to bank for the crypto industry until regulators from the Federal Reserve approached it two years ago with a surprise, and unwritten, new directive: Its crypto deposits, accounting for 90 percent of its business, had to be reduced to 15 percent, according to people familiar with the matter. It amounted to a death sentence for the bank. Unable to grow the rest of its business quickly enough to survive, Silvergate opted to voluntarily liquidate shortly after, effectively debanking its remaining customers. Now, speaking publicly about the situation for the first time, Silvergate’s chairman, Mike Lempres, says the bank was otherwise healthy and obeying the law. “They were shutting us down, without saying they were shutting us down,” he says. “There was a change in policy that came pretty much out of the blue for us, and it came suddenly and it killed the business model.” And, he adds, “Everything I saw pointed to it coming from Washington, D.C.”
Even if the hypothetical rationale for debanking was obvious and relatively in the open, neither Lempres nor most others have any written proof that the decisions were due to their crypto affiliations. (McCauley, for one, says none of the banks told him, let alone put in writing, why they wouldn’t work with Anchorage — which is also a regulated bank.) Coinbase, the largest American crypto company, tried to use its considerable resources to get the industry some answers through Freedom of Information Requests — then sued the FDIC when it did not initially comply. Paul Grewal, Coinbase’s chief legal officer, says he’s “very confident” something illegal happened and that there’s more evidence to be found. “I don’t know what more proof people need to understand the severity of that instruction. That’s a violation of law. We now have in black-and-white letters confirming what many had suspected: Collectively, it shows in pretty plain terms that the Biden administration was working to take crypto out, and to do it on a variety of fronts,” he says. “I know this can sound a little bit like a crypto conspiracy, but they told us these letters were a figment of our imagination too, and we proved that they weren’t. At some point the conspiracy unravels.”
In early January, the FDIC was forced by a court order to turn over unredacted versions of documents it had already released to Coinbase. The new revelations at the very least proved that the FDIC had been trying to hide something, even if its reasons for doing so were less clear. An FDIC letter stated that a certain bank “should not proceed with any crypto-asset activity until such time that the FDIC has determined [REDACTED] ability to implement the activity in a safe and sound manner.” It was one of the clearest directives to surface so far — in most of its previous letters, the FDIC had phrased this as a “request.” The issue got enough attention that even the leadership of the FDIC acknowledged for the first time that it might have a problem. On January 10, Travis Hill, who ibecame the acting chairman of the FDIC on inauguration day, gave a speech in which he denounced “Choke Point–like tactics” and urged a “new approach” toward crypto. “Efforts to debank law-abiding customers are unacceptable, regulators must work to end it, and there is no place at the FDIC for anyone who has pushed — explicitly or implicitly — banks to stop serving law-abiding customers,” he said. (Travis Hill declined to comment when asked if the FDIC had found examples of its staffers engaging in such conduct.)
The pattern is enough to convince some legal experts on this issue that the government was clandestinely communicating to banks an unofficial policy that it didn’t have the power to make. “The government’s pressure tactics to debank lawful businesses is patently illegal — it violates the most basic conceptions of due process and the limits of regulatory power,” says David Thompson, the managing partner of D.C.-based law firm Cooper & Kirk, who also co-authored a paper last year positing that Choke Point 2.0 was real. “Unelected bureaucrats don’t have the power to target businesses they disapprove of and should be held to account for this egregious overreach.”
Thompson is experienced with litigating the regulatory questions in this case: He is the lawyer who successfully argued on behalf of payday lenders that the original Operation Choke Point violated the due process clause of the Fifth Amendment, ultimately winning the settlement with the FDIC in 2019.
In order for crypto companies to sue the government on the same grounds, they would likely have to find something similar in writing — though even those in the industry aren’t sure something like this exists, especially if regulators and banks learned from the first Operation Choke Point not to put this stuff in emails. But there is at least one entrepreneur who was told directly by a bank that crypto was the reason they couldn’t work together.In early 2023, Ryne Saxe, the co-founder and CEO of Eco, a San Francisco–based blockchain company, was working to expand a new app that required partnering with a number of banks to keep it running on the backend. But after months of working with those banks on a first-name basis, Eco was abruptly dropped.“They just cut off the conversation, and they said we’re sorry, we’re no longer accepting any new business with customers that touch crypto,” says Saxe.
When Saxe pushed for answers, he learned from one of the bankers that regulators were on site, examining all of its blockchain clients, “and ostensibly threatening to make life painful if they had crypto customers.” The banker told Saxe he’d never experienced that level of scrutiny in his 25-year career. Eco, which had already obtained money transmitter licenses in many states, ultimately shut the app down altogether last summer as it became unworkable.
Experiences like this will be the subject of multiple congressional hearings on “Choke Point 2.0” this week, in the Senate on Wednesday and the House on Thursday, and if the tone of Republicans leading up to the hearing is any indicator, it will be a tense show. Senator Cynthia Lummis in January sent a fiery letter to the FDIC, citing whistleblower complaints, threatening “swift criminal referrals” for anyone caught destroying evidence related to the investigation, and Trump himself escalated the issue in recent comments at Davos, describing a broader effort to debank “many conservatives.”
A true bombshell would be uncovering actual on-paper evidence of inappropriate behavior by the government — and that would shock even the crypto industry itself.
