Crypto Founders Allege Biden Administration Weaponized U.S. Banking System

Prominent figures in the cryptocurrency industry are accusing the Biden administration of orchestrating a systemic effort to debank blockchain companies, drawing parallels to the controversial Operation Chokepoint of the Obama era. This alleged “Operation Chokepoint 2.0” has sparked heated debates across the tech community, with claims that banks were pressured to sever ties with crypto firms under government intimidation.

Allegations of Financial Censorship

The controversy gained traction after Elon Musk, via his platform X, asked, “Did you know that 30 tech founders were secretly debanked?” Tyler Winklevoss, co-founder of Gemini, quickly responded, confirming the claim and stating, “They also assassinated several banks because they banked crypto companies. Totally unlawful, evil behavior.”

Coinbase CEO Brian Armstrong echoed Winklevoss’s concerns, alleging that Senator Elizabeth Warren and SEC Chair Gary Gensler were key architects of the strategy. Armstrong added, “It was one of the most unethical and un-American things that happened in the Biden administration.” He also revealed that Coinbase is pursuing documents through Freedom of Information Act (FOIA) requests to uncover the full extent of government involvement.

Historical Context: Operation Chokepoint’s Legacy

Operation Chokepoint, initiated in 2013, targeted industries deemed “high risk,” such as payday lenders and firearms dealers, by pressuring banks to deny services. Critics argued the program unlawfully punished legitimate businesses. Although officially ended in 2017, crypto leaders claim a similar campaign targeting blockchain companies began in 2021, shortly after President Biden took office.

Debanking’s Real-World Impact

Marc Andreessen, a prominent venture capitalist, labeled the situation a blatant misuse of power during a podcast appearance. “This is about control, not compliance,” he said. Andrew Torba, founder of social media platform Gab, shared his struggles with debanking, describing a relentless cycle of account closures and financial ostracization. “Without a bank account, you can’t store cash, run payroll, or pay bills. That’s the point—choke businesses until they die.”

High-Profile Cases and Legal Battles

Caitlin Long, CEO of Custodia Bank, confirmed she had been debanked multiple times and is now suing the Federal Reserve, with oral arguments scheduled for January 2025. Crypto lawyer John Deaton called Long’s case a pivotal battle, saying it is “arguably the most important fight against unelected bureaucrats and the deep state protecting the banking system’s status quo.”

Industry Backlash and Political Fallout

The debanking allegations have spurred calls for reform and transparency. Armstrong warned that these actions contributed to the Democrats’ electoral losses, urging the party to distance itself from figures like Warren. Andreessen emphasized the broader implications: “This isn’t just about crypto. It’s about freedom and the misuse of financial systems for political ends.”

Crypto leaders are demanding accountability, with calls for an end to financial censorship and greater oversight to prevent such practices. “The government shouldn’t be using the banking system as a political weapon,” Andreessen concluded.

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