a16z: Where Did the U.S. Government's Crypto Crackdown Come From? Which Agencies Are Involved?
Original Article Title: Debanking: What you need to know
Original Source: a16z crypto
Original Translation: 0xjs@, Golden Finance
a16z Co-Founder Marc Andreessen revealed on the November 28 Joe Rogan podcast that 30 tech founders had their bank accounts closed by US banks due to their involvement with crypto. In response, on December 6, a16z crypto published an op-ed discussing "Debanking: What you need to know." The translation by 0xjs@ Golden Finance is as follows:
「Debanking」 has been happening behind the scenes for years but has now become a public discussion topic once again. Many individuals, policymakers, companies, and the most important entrepreneurs for US innovation have spoken out on this issue. As the cryptocurrency industry and specific institutions have repeatedly appeared in this discussion, here is a brief explanation of this phenomenon to help distinguish signal from noise.
But first, what is 「debanking」?
In essence, debanking refers to law-abiding individuals or entities unexpectedly losing their banking relationships, or even being kicked out of the banking system.
Debanking is different from a situation where an entity loses banking services due to being suspected or confirmed of engaging in fraud, money laundering, or other illegal activities.
Debanking can occur without any apparent investigation, detailed explanation, or prior notice, without giving the entity enough time to transfer funds. Most importantly: there is no due process, appeal process, or other recourse.
Why is this important?
We have established fair banking rules, attempting to ensure that people are not discriminated against based on age, gender, marital status, nationality, race, religion, etc. However, these rules do not restrict banks (or their regulators) from arbitrarily denying or revoking someone's banking service rights.
Thus, debanking can be used by specific political actors/institutions as a tool or weapon, systematically employed without due process to target individuals or industries. Imagine if the government decided who could or could not access electricity solely based on political stance or some arbitrary reason... without explanation, investigation, notice, or providing remedies. Debanking is precisely that kind of scenario.
Why Debanking?
Not all bank closures are considered "debanking." Banks can close a customer's account for various reasons, including if they believe the customer is engaged in suspicious activities. Banks may also choose to proactively reduce regulatory compliance costs and workload by limiting exposure to certain individuals, industries, or business models.
However, it is not this legitimate activity that has raised concerns about debanking. Instead, many debanking concerns stem from reports of regulatory agencies abusing their power, pressuring banks to cancel customers in certain industries or those associated with political factions or interests disliked by the political establishment. This allows these regulatory agencies to wield power over industries, even though Congress has never authorized such power.
Banks often acquiesce to this pressure as they do not wish to conflict with regulators. Many banks also do not wish to deal with compliance issues, meaning additional scrutiny imposed by bank regulators for non-compliance.
Where Did "Operation Choke Point" Come From?
In 2013, the U.S. Department of Justice was found to have initiated an investigation into fraud and money laundering by certain businesses, a policy move of the President's Financial Fraud Enforcement Task Force. This marked a shift in government strategy: instead of targeting individual companies' wrongdoing, the government issued subpoenas to banks and payment processors requesting information on their customers engaged in high-risk or politically unfavorable yet legal businesses.
In other words, the government was using regulatory power unjustly to "choke off" financial service channels and close accounts, with the aim of stifling enterprises in industries the government did not favor (as observed by leaders of the American Bankers Association and the Financial Services Roundtable at the time). In 2014, Frank Keating (former President and CEO of the American Bankers Association, former Governor of Oklahoma, and Honorary Chairman of the Bipartisan Policy Center) pointed out in a column in The Wall Street Journal:
"When you become a banker, no one pins a badge on you, nor do you don a judicial robe. So why is the Justice Department telling bankers to act like cops and judges? The Justice Department's new investigation, called 'Operation Choke Point,' demands that banks identify customers who might be breaking the law or just doing things that government officials don't like."
Due to strong opposition from the law, Congress, and institutions, the program was shut down the following year.
Today, the phrase 「Operation Choke Point 2.0」 is sometimes used to refer to the government cutting off banking services to "political enemies and unwelcome tech startups." Or in other words, this term refers to banks "severing relationships with customers deemed politically incorrect, extreme, dangerous, or overstepping." However defined, the term represents an issue affecting both ends of the political spectrum and entities across the political spectrum.
Which Institutions are Involved?
The inner workings of "Choke Point" — as well as any other related or subsequent systemic efforts aimed at depriving specific entities or industries of banking services — were previously unknown, as any investigations (if conducted) were carried out behind closed doors, and Freedom of Information Act requests were pending. However, on December 6, a court filing in such a FOIA case revealed that the Federal Deposit Insurance Corporation (FDIC) instructed at least one bank (in a letter dated March 11, 2022): "…the FDIC has not yet determined what regulatory paperwork banks engaging in such activities would need, if any. As a result, we respectfully request that you cease all activities related to digital assets." Numerous FDIC letters were submitted as appendices to the filing.
At the same time, it is already known that the original Financial Fraud Enforcement Task Force that implemented "Operation Choke Point 1.0" in 2013 included the Federal Deposit Insurance Corporation (FDIC) and the Department of Justice (DOJ) among others. The Office of the Comptroller of the Currency (OCC) — an independent bureau under the U.S. Department of the Treasury — also appears to have been involved, along with the U.S. central bank — the Federal Reserve Board (FRB). The Consumer Financial Protection Bureau (CFPB) is also mentioned.
Note: The U.S. government is not the only country to implement debanking policies. Other countries, such as Canada, have also employed such strategies; the UK has also had to investigate complaints about government-led debanking policies.
Why is the Government Doing This? What are the Effects?
Debanking is motivated by various reasons, from combating fraud by payment processors to preventing high-risk businesses from operating, as these businesses may be seen as having more links to money laundering. These reasons are often referred to as "de-risking" rather than "debanking": "Financial institutions terminating or restricting business relationships with broad categories of customers without individually assessing and managing the risks posed by those customers."
In a broader sense, de-risking and debanking can serve as a "partisan tool," choking off legitimate businesses solely for political reasons. Another reason may be that certain government entities wish to have more discretion and power in deciding "where consumers can access loans, financial products, and other banking services and under what circumstances."
It is important to note that the issue does not lie in the performance of a specific government entity's duties. The issue lies in the government's excessive interference with legitimate businesses (or general abuse of power)—with no meaningful due process and no ability to constrain its actions, often carried out behind the scenes. Particularly because there are already enough laws and legal means to regulate businesses for legitimate reasons, such as providing consumer protection, preventing money laundering, and stopping other criminal activities.
The use of debanking strategies can lead to many unforeseen consequences. Even if the aim is truly to protect consumers and the banking system, the results may backfire, hindering consumer choice or causing a chilling effect on the entire industry. These practices also undermine the U.S. government's own policy objectives, as highlighted in the U.S. Department of the Treasury's Report on De-Risking (2023):
· Excluding financial activities from the regulated financial system;
· Obstructing remittances or delaying the smooth transfer of international development funds and humanitarian/disaster relief funds;
· Impeding the effective use of the financial system by low- to middle-income groups and other underserved populations;
· Undermining the central position of the U.S. financial system.
Ultimately, employing a "debanking" strategy could inadvertently punish legitimate businesses and individuals through association. For example, someone may have their previously approved mortgage loan revoked simply because they work for an open-source foundation in the cryptocurrency industry.
For all the reasons mentioned above, many consider the practice of debanking to be "un-American." When debanking indiscriminately targets emerging technologies, it is undoubtedly anti-innovative.
How Widespread Is Debanking?
While we cannot speak for the entire industry or specific interests, as venture capitalists in the cryptocurrency industry, we have witnessed firsthand at least 30 debanking cases occurring in our portfolio companies and founders over the past four years. Coinbase has also publicly stated that they have identified at least "20 instances where the FDIC has requested that a bank 'pause,' 'stop providing,' or 'not continue' providing cryptocurrency banking services."
There may be more cases like this. Due to many entrepreneurs and small businesses being concerned about further retaliation or lacking resources to address the issue, they have been hesitant to come forward, and thus the issue has gone unreported.
For companies in our portfolio, many instances of debanking have occurred with companies that are pre-revenue and pre-token issuance. Their bank accounts have received venture capital funding (provided through institutions like pension funds and university endowments), with these companies using the funds for employee salaries and regular business expenses—just like any other tech startup.
So, what reasons have these companies been given? Whether written or (more commonly) verbal? The stated reasons include "We do not offer cryptocurrency banking services," and more commonly: "Your account has been closed due to compliance-related issues. Please withdraw all funds immediately." These companies have also been informed of this, but have not received specific information on which exact "compliance" issue, nor can they remedy it if one does exist. Finally, other reports we have received from companies include:
· Being informed that "the business compliance back-office team closed the account and prevented us from opening any other account. No other reasons given, and no appeals process provided";
· Being rejected due to "a lack of trust in anyone operating a crypto company";
· Receiving baseless inquiries and notices, bringing costly cycles and undue stress to the startup—already operating lean compared to large companies.
You may also like

Morning Report | BitMine increased its holdings by 126,971 ETH last week; trader Eugene announced his exit from the crypto market

Wang Chuan: How can one not feel anxious after the neighbor Old Wang made thirty times profit by investing in storage stocks? (Seven) - A quarter-century cycle

Cryptocurrency CEXs are flocking to sell US stocks, and traditional brokerages are facing an "uninvited guest."

$75 billion in foreign capital has fled, and South Korean retail investors have absorbed it all using leverage

Japan’s Three Megabanks Plan Joint Stablecoin Issuance in Fiscal 2026
MUFG, SMBC, and Mizuho reportedly plan to jointly issue fiat-pegged stablecoins in fiscal 2026, signaling Japan’s growing push into bank-led digital payment infrastructure.

Humanity Discloses H Token Dual-Chain Attack Details, With Losses on Ethereum and BSC Exceeding $36 Million
Humanity said the H token attack across Ethereum and BSC caused more than $36 million in losses after leaked ProxyAdmin keys enabled malicious contract upgrades and token minting.

White House Discusses CLARITY Act With Law Enforcement Ahead of Senate Vote
The White House discussed the CLARITY Act with law enforcement ahead of a Senate vote, focusing on illicit finance risks and developer protections.

Bitcoin Trading Guide 2026: Strategies for Experienced Traders

What Is XAUT and PAXG? Why Tokenized Gold Is Booming in 2026

Will the SpaceX IPO Hurt Bitcoin? Here's What Traders Are Watching

Foreign selling in the South Korean stock market accelerates, with cumulative net sales reportedly reaching $75 billion this year
On June 9, The Kobeissi Letter, citing Goldman Sachs data, reported that global investors are selling South Korean stocks at an unusually rapid pace. In the latest trading session, foreign investors sold about $801 million worth of Kospi constituent stocks again; total foreign outflows last week reached about $10 billion, and the market has been in net foreign selling on nearly every trading day over the past month. According to the data cited in the report, foreign investors have sold about $75 billion worth of South Korean stocks so far this year. Meanwhile, South Korean retail and institutional investors together recorded roughly $69 billion in net buying over the same period, suggesting that the market’s main buying support has come from domestic capital rather than returning overseas funds. The information currently disclosed still mainly comes from The Kobeissi Letter’s retelling and Goldman Sachs data summaries, while public details on the statistical period and the specific definition of “selling” remain relatively limited.

Fortune Warns of Strategy’s Financing Structure Risks as Bitcoin Premium Narrows
Fortune warned that Strategy’s Bitcoin treasury model faces growing financing risks as MSTR’s net asset premium narrows and preferred stock dividend pressure increases.

Ferrari Challenge Le Mans: Carl Moon to Dominate in WEEX Livery

Sahara AI Responds to SAHARA’s Sharp Drop: No Contract or Product Security Issues Found, Internal Investigation Underway
Sahara AI responded to SAHARA’s 60% price drop, saying no token contract or product security issues have been found and an internal investigation is underway.

WEEX Deposit/Withdrawal Dynamic Island: Your Asset Status, Always in Sight

Scaling Crypto Derivatives: The Digital Asset Infrastructure Behind High-Volume Trading
In the fast-moving digital asset ecosystem, derivatives platforms face an extreme architectural test. High-leverage futures markets demand more than just standard security—they require absolute operational precision, zero-latency matching engines, and ironclad structural scalability, all while navigating intense market volatility.
As global platforms scale to meet these demands, the industry is shifting away from rigid, monolithic setups toward a more agile, "decoupled" infrastructure philosophy.
The Blueprint for High-Volume Copy TradingFor elite global exchanges like WEEX (founded in 2018), this architectural choice becomes critical when scaling high-volume retail features like social copy trading. When thousands of users automatically mirror the real-time strategies of elite traders simultaneously, it triggers sudden, monumental spikes in concurrent transactional volume.
To prevent execution latency or settlement bottlenecks during these peak volatility events, a platform's primary engine must remain entirely dedicated to risk management, copy-trade synchronization, and order matching.
The Architectural Rule: New-generation platforms must separate front-end user execution engines from heavy backend infrastructural overhead to eliminate operational friction.
By separating these layers, platforms can maintain complete sovereignty over their trading environments and user experiences while strategically aligning with institutional-grade infrastructure ecosystems. This strategic framework allows modern exchanges to leverage advanced Digital Asset Custody infrastructure such as Cobo’s behind the scenes, ensuring that backend wallet management scales elastically alongside trading spikes.
Capitalizing on Market Momentum and 400× LeverageIn a derivatives arena where platforms offer up to 400× leverage on perpetual contracts, capital efficiency and market agility are core business metrics. To capture market momentum, an exchange needs the ability to rapidly expand its asset offerings, supporting everything from legacy crypto assets to sudden, trending altcoins across a massive library of trading pairs.
Adopting a flexible, scalable Wallet-as-a-Service (WaaS) solution such as Cobo’s could completely rewrite the development timeline for high-growth exchanges. Instead of spending months of engineering capital building out custom backend wallet architectures for every new blockchain network, platforms can deploy localized infrastructure in days.
This agility allows platforms to instantly scale their listings to over a thousand trading pairs without compromising security or delaying time-to-market. It mirrors the exact operational advantages seen during high-velocity market events, similar to how advanced wallet infrastructure empowers platforms during sudden asset surges; allowing exchanges to pass that speed and liquidity directly to their global user base.
A Mature Foundation for GrowthThe synergy between trusted infrastructure ecosystems and global trading platforms represents the natural evolution of a maturing crypto market. As WEEX continues to scale its global spot and derivatives offerings for over 6 million users, adopting robust backend paradigms proves that platforms no longer have to compromise between cutting-edge trading velocity and uncompromised structural security.

Get Paid to Onboard? Try WEEX’s New Homepage with Rewards for Registration, Deposit & Trade

WEEX Custom Layout: Build Your Perfect Trading Workspace in Seconds
Morning Report | BitMine increased its holdings by 126,971 ETH last week; trader Eugene announced his exit from the crypto market
Wang Chuan: How can one not feel anxious after the neighbor Old Wang made thirty times profit by investing in storage stocks? (Seven) - A quarter-century cycle
Cryptocurrency CEXs are flocking to sell US stocks, and traditional brokerages are facing an "uninvited guest."
$75 billion in foreign capital has fled, and South Korean retail investors have absorbed it all using leverage
Japan’s Three Megabanks Plan Joint Stablecoin Issuance in Fiscal 2026
MUFG, SMBC, and Mizuho reportedly plan to jointly issue fiat-pegged stablecoins in fiscal 2026, signaling Japan’s growing push into bank-led digital payment infrastructure.
Humanity Discloses H Token Dual-Chain Attack Details, With Losses on Ethereum and BSC Exceeding $36 Million
Humanity said the H token attack across Ethereum and BSC caused more than $36 million in losses after leaked ProxyAdmin keys enabled malicious contract upgrades and token minting.



