US crypto CEOs admit to being 'secretly persecuted' by Biden administration

a16z fund founder Marc Andreessen reveals that more than 30 founders, mainly in the crypto industry, have had their accounts closed and services blocked by banks for unknown reasons.

On November 27, billionaire Elon Musk retweeted a video between popular podcaster Joe Rogan and a16z investment fund founder Marc Andreessen, revealing that more than 30 founders of technology companies, mainly in the cryptocurrency sector, have had their accounts closed (also known as debanked) by banks.

Did you know that 30 tech founders were secretly debanked? https://t.co/gmnCir43XD

— Elon Musk (@elonmusk) November 27, 2024

Operation Choke Point 2.0 "ban" campaign - A plot to "strangle" the crypto industry?

During the talk, Marc Andreessen addressed the incident and detailed the “debanking” strategy targeting tech companies, including those in the cryptocurrency space. Accordingly, banks cut off financial services to more than 30 founders of these companies without any clear reason, causing heavy losses to the founders and businesses.

On a new episode of JRE:

Marc Andreessen (@pmarca) dives into secret debanking of tech founders, AI control plans, and remote workers gaming the system.

Nothing was off limits, from food policy to Silicon Valley's civil war.

Let me save you 3 hours: 🧵 pic.twitter.com/qJx92x5heh

— Ben Averbook (@benaverbook) November 26, 2024

Accordingly, this mass debanking campaign is called Operation Choke Point 2.0 (OCP 2.0) by the crypto community. This is a "conspiracy theory" about the US government having a secret strategy to "destroy" sectors that are not favored by the government by using banking regulators to pressure banks to freeze the accounts of companies and individuals related to crypto.

This term comes from "Operation Choke Point", a campaign that was deployed by the Obama administration in the period 2013 - 2017 to restrict sensitive sectors such as gun and ammunition trading, marijuana, small-scale credit lending, etc.

How did OCP 2.0 take place?

The story begins in 2023, after the collapse of FTX, the US warned banks against exposure to the crypto sector and at the same time many crypto companies had their accounts frozen without any explanation. This situation continued to escalate when the most important bank with crypto, Silvergate, suddenly announced voluntary liquidation of its assets.

Although many people believe that this is an inevitable result of banks "giving a hand" to the crypto industry, however, analyst Nic Carter believes that these banks were "sacrificed" - referring to the intentional political intervention.

Over a year later, and choke point 2.0 was still in place. I took another look at Silvergate, post bankruptcy filing, and was increasingly convinced they were murdered by government edict. https://t.co/qGsSoi3aCG

— nic carter (@nic__carter) November 27, 2024

Accordingly, the Federal Deposit Insurance Corporation (FDIC) has imposed a 15% cap on crypto-related deposits at banks, through a statement without any official announcement. This creates an extremely large financial pressure on crypto companies, forcing them to close their accounts or switch to other banks, which are already limited in their ability to provide financial services.

Meanwhile, Silvergate Bank received a series of bad news when it was sued for violating securities laws, US authorities investigated the relationship between Silvergate and FTX. This information made the crypto community gradually believe that Silvergate's collapse was the result of a government-directed campaign, turning the bank into a political tool, affecting industries, especially cryptocurrencies.

Reactions from crypto founders

Big players in the crypto industry and victims of the campaign immediately spoke out after the news of this crackdown spread.

The most prominent story is that of Frax Finance founder Sam Kazemian, who shared that he had kept quiet about this for almost a year out of fear, but now feels confident that many others have exposed this incident together.

Kept quiet about this for almost a year out of fear but since I'm in good company with @tyler @cameron @brian_armstrong @elonmusk now..Last December, I got a call from JPM saying "we have to close anyone's account that we know their primary source of income/wealth is crypto. This… https://t.co/xvJrO5eots

— sam.frax (@samkazemian) November 28, 2024

Sam Kazemian added:

"Last December, I got a call from JPMorgan saying that the bank had to close the accounts of anyone whose primary source of income or assets was crypto. I understand that 99% of people will never get that kind of transparency or explanation. I wanted to publicly add my name to the OCP 2.0 "debanked" list. This is real. The crackdown is real,"

Caitlin Long, CEO of Custodia Bank, said that she has also been "debanked" multiple times and is currently preparing a lawsuit against the US Federal Reserve (Fed) related to these actions.

Meanwhile, Gemini CEO Tyler Winklevoss also confirmed that he was “debanked” because of his company’s involvement in cryptocurrencies and suggested that the number of affected companies could be much larger than 30

Coinbase CEO Brian Armstrong spoke out to affirm that this action is one of the most unethical and illegal actions in the Biden administration to “destroy” the crypto industry. Armstrong said that he and other leaders are collecting documents to clarify who is behind these decisions.

Coinbase CEO also commented that the suppression of crypto is also one of the main reasons why the Democratic Party lost quickly in the recent US presidential election, especially when Mr. Donald Trump repeatedly pledged to revive the crypto industry in the US and reverse the moves that have suppressed the market over the past years.

Coinbase itself filed a lawsuit in June against the SEC and FDIC for allegedly “suppressing” the crypto industry, including the Operation Choke Point 2.0 conspiracy theory.

Many have also called for legislation to stop the politicization of banking regulation, protect financial freedom, and stop “choke point” campaigns that deprive legitimate companies of financial access.

Several politicians, including Republicans, have criticized and promised to end OCP 2.0 as soon as they take office. However, this issue requires strong intervention from both legislative bodies and industry organizations.