In advance of the Senate Banking Committee hearing on the nefarious debanking movement by the federal government, Anchorage Digital, a federally chartered digital bank, has shared its experience in prepared testimony. Today, Anchorage founder and CEO Nathan McCauley will testify how Anchorage became persona non-grata to the financial services as the Biden Administration leveraged federal regulators to compel banks to exit relationships with digital asset affiliated firms.
Not being able to access essential banking services can kill a business. You need to be able to deposit and withdraw cash, pay your people, and more to operate a business. Debanking allegedly was a shady method the Biden Administration utilized to undermine the crypto sector as it was deemed unsavory by members of the Biden Administration.
McCauley shares that after a several-year relationship with their unnamed bank, one day in June 2023, the bank reached out and gave them 30 days to close their account without any justification.
McCauley says that while they eventually found another banking partner, the disruption caused them to lay off 20% of their workforce.
McCauley believes the cause of all this was a series of anti-crypto policies enacted by the Biden Adminstration:
- In January 2021, the OCC put a hold on its Fair Access Rule, which may have prevented discrimination against disfavored industries such as crypto.
- In November 2021, the OCC issued Interpretive Letter 1179, requiring banks to seek permission from the OCC before engaging in legal crypto-banking activities.
- In April 2022, the FDIC required banks under its supervision to flag any current or potential business with crypto and warned them of the risks of conducting business with such entities.
- In April 2022, the SEC also took action, issuing SAB 121 [recently revoked], effectively preventing any public bank from providing custody of digital assets at scale.
- In January 2023, the Federal Reserve, FDIC, and OCC issued a joint statement warning banks against serving crypto clients or engaging in crypto activities of their own. The implied threat of enforcement action was clear, leaving many banks with no choice but to cut off crypto clients completely.
One wonders how the Federal government got away with all of this.
McCauley also shares that he knows dozens of crypto innovators who have been debanked. Some of these firms he invested in. Some have been forced to shut down.
The Senate hearing on Debanking is today, February 5, 2025, at 10 AM.
