David Edwards
Drawing comparisons to the infamous Operation Chokepoint of the Obama period, prominent players in the bitcoin sector accuse the Biden government of coordinating a systematic attempt to debank blockchain startups. Claiming that banks were under government coercion and urged to cut links with cryptocurrency companies, this supposed “Operation Chokepoint 2.0” has spurred intense arguments within the tech industry.
Charges of Financial Censorship
The scandal started when Elon Musk, using his platform X, questioned, “Did you know that 30 tech founders were secretly debanked?” Co-founder of Gemini Tyler Winklevoss answered fast to validate the allegation and said, “They also killed numerous banks because they banked crypto firms. entirely illegal, nasty act.”
Reflecting Winklevoss’s worries, Coinbase CEO Brian Armstrong said that primary designers of the plan were Senator Elizabeth Warren and SEC Chair Gary Gensler. Armstrong followed up, “It was one of the most unethical and un-American things that happened in the Biden administration.” He also said that Coinbase is looking for records via Freedom of Information Act (FOIA) requests in order to fully expose government participation.
Background Information: Legacy of Operation Chokepoint
Initiated in 2013, Operation Chokepoint pushed banks to refuse services, therefore focusing on businesses deemed “high risk,” including payday lenders and gun sellers. Critics said the scheme penalized respectable companies illegally. Officially ending in 2017, crypto leaders assert that a similar campaign aiming at blockchain businesses started in 2021, just after President Biden entered office.
Real-world effects of debanking
Renowned venture entrepreneur Marc Andreessen called the circumstances a clear abuse of authority during a podcast appearance. “This is about control, not Compliance,” he remarked. Founder of social media network Gab, Andrew Torba, discussed his debanking challenges and a never-ending cycle of account closures and financial ostracism. You cannot conduct payroll, handle bills, or save money without a bank account. That is the point—chokes companies till they die.
Notable Cases and Legal Arguments
With oral sessions set for January 2025, Custodia Bank CEO Caitlin Long claimed she had been debanked many times and is now suing the Federal Reserve. John Deaton, a crypto attorney, said Long’s lawsuit is “arguably the most important fight against unelected bureaucrats and the deep state protecting the banking system’s status quo.”
Industry Reversal and Political After Effects
Calls for change and openness have come from the debanking claims. Armstrong cautioned the Democrats to disassociate themselves from leaders like Warren because their activities helped explain their election defeats. Andreessen underlined the wider consequences: “This isn’t just about crypto. It is about freedom and the abuse of financial systems for political purposes.
Leaders in cryptocurrencies are calling for responsibility, opposing financial restrictions and more monitoring to stop such behaviors. Andreessen drew the conclusion, “The government shouldn’t be using the banking system as a political weapon.”
