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Frax Finance was allegedly among the crypto companies targeted by the debanking effort, according to the platform’s founder.
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More than 30 technology and cryptocurrency founders in the United States have reportedly been denied access to banking services in what some insiders describe as an orchestrated effort dubbed “Operation Chokepoint 2.0.”
“Did you know that 30 tech founders were secretly debanked,” asked Tesla founder and billionaire Elon Musk in a Nov. 27 X post.
In the post, Musk shared a clip of Andreessen Horowitz co-founder Marc Andreessen discussing the issue on the Joe Rogan Experience podcast. In the clip, Andreessen claims:
“Operation Chokepoint 2.0 is primarily against their political enemies and disfavoured tech startups. In the tech world, we had over 30 tech founders debanked in the last four years. It’s been a big recurring pattern.”
Source: Elon Musk
Coinbase co-founder and CEO Brian Armstrong added his voice to the allegations, calling out “the unethical and un-American things that happened in the Biden administration,” in a Nov. 27 X post.
Source: Brian Armstrong
Armstrong claimed Coinbase is collecting Freedom of Information Act requests to identify those involved in the debanking effort.
The collapse of crypto-friendly banks earlier in 2023 sparked the first allegations of Operation Chokepoint 2.0. Critics, including venture capitalist Nic Carter, described it as a government effort to pressure banks into cutting ties with cryptocurrency firms.
Related: FDIC chair, ‘architect of Operation Chokepoint 2.0’ Martin Gruenberg to resign Jan. 19
Frax Finance founder recalls JPMorgan account closure
While the alleged operation has not been confirmed, crypto industry players have detailed challenges in securing banking services.
Sam Kazemian, founder of Frax Finance, recounted a conversation with JPMorgan Chase in December 2022. “They said, ‘We have to close anyone’s account that we know their primary source of income/wealth is crypto,’” Kazemian wrote in a Nov. 28 post on X, attributing the directive to JPMorgan CEO Jamie Dimon.
Source: Sam Kazemian
In March 2023, the US banking system took a hit following the sudden collapse of Silicon Valley Bank and the voluntary liquidation of Silvergate Bank. Signature Bank was also forced to close operations by New York regulators on March 12, two days after Silvergate Bank’s liquidation.
The sudden collapse of three crypto-friendly US banks was called Operation Chokepoint 2.0 by crypto venture capitalist Nic Carter, who saw it as a “coordinated effort” to unbank the crypto industry.
Related: ‘Nothing is a coincidence with the government,’ claims US lawmaker on Operation Choke Point 2.0
Tech industry debanking is why Andreessen supported Trump
The ongoing tech and crypto industry debanking is why Andreessen decided to support Donald Trump in the the US presidential election on Nov. 5.
During the three-hour podcast episode with Joe Rogan, Andreessen stated:
“This is why we ended up supporting Trump. We can’t live in a world where somebody starts a company that’s completely legal, and then gets sanctioned and embargoed by the US government, through a completely unaccountable, no-due process.”
Trump’s victory is seen as a net positive for crypto regulations and risk assets leading into 2028. Demand for leveraged Ether (ETH) exchange-traded funds rose over 160% since Trump’s victory, signaling a potential ETH rally to above $4,000.
Magazine: Unstablecoins: Depegging, bank runs and other risks loom
This article first appeared at Cointelegraph.com News
