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Now under a Republican-controlled US Congress, the Senate Banking Committee focused its efforts on addressing claims the government “bullied” banks into halting services to crypto firms.
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Massachusetts Senator Elizabeth Warren seemed to specifically avoid mentioning crypto in a hearing addressing claims US government entities pressured financial institutions into pausing or stopping services for digital asset firms.
In a Feb. 5 hearing on debanking with the Senate Banking Committee, Senator Warren used her opening remarks as the ranking member to address thousands of complaints alleging debanking for being formerly incarcerated, being Muslim-American and operating cannabis businesses. She questioned Anchorage Digital co-founder and CEO Nathan McCauley about his experiences and the Brookings Institution’s Aaron Klein regarding how the Consumer Financial Protection Bureau (CFPB) could stop “unfair debanking.”
“I don’t think for a second that you should be locked out of our banking system,” said Warren — possibly referring to Anchorage — adding:
“If banks are adopting policies that routinely debank people based on their beliefs or other illegitimate reasons — that’s wrong, it needs to be stopped.”
Anchorage Digital co-founder and CEO Nathan McCauley testifying at Feb. 5 Senate Banking Committee hearing. Source: US Senate Banking Committee
In his written testimony for the committee, McCauley essentially offered only his own experience and anecdotes as evidence US government officials engaged in a concerted effort to debank crypto firms, colloquially called “Operation Chokepoint 2.0.” He claimed to have “spoken to dozens of crypto leaders” with debanking experiences involving themselves or their companies, adding he “believe[s] that regulators pressured banks to cut off services to the crypto industry.”
Pivoting from crypto debanking claims
Under questioning from Warren, McCauley said he didn’t think it was “productive” to name what banks refused to offer Anchorage services after the firm’s account was threatened with closing in 2023. The Massachusetts Senator asked McCauley about the appeals process after his account denials and whether regulators should have a database covering debanking claims, slightly pivoting to others’ debanking complaints when the Anchorage CEO mentioned crypto.
Related: FDIC releases 790 pages of crypto-related letters in regulatory pivot
Warren’s remarks contrasted with those of Chair Tim Scott and Republican senators on the committee, many of whom questioned the witnesses about claims the Federal Deposit Insurance Corporation (FDIC) and Securities and Exchange Commission used their authority to request banks’ pause or halt services to crypto firms. A lawsuit spearheaded by Coinbase in June 2024 resulted in the release of letters showing the FDIC asked certain financial institutions to “pause” crypto banking activities.
“[…] For almost 3 years, this one-two punch by the FDIC and the SEC had the intended effect of preventing banks from serving as a custodian of crypto and choking out banks from providing demand deposit services, which prevented banks from being the on-off ramp for legal crypto companies,” said Old Glory Bank president, CEO and co-founder Mike Ring in written testimony for the hearing.
The House Financial Services Committee is scheduled to conduct a similar hearing exploring the debanking claims on Feb. 6. Coinbase chief legal officer Paul Grewal and Fred Thiel, CEO of crypto mining firm MARA, are expected to testify.
Magazine: XRP to $4 next? SBF’s parents seek Trump pardon, and more: Hodler’s Digest, Jan. 26–Feb. 1
This article first appeared at Cointelegraph.com News
