In a recent conversation on The Joe Rogan Experience, Marc Andreessen spotlighted a troubling trend impacting the financial landscape: debanking. Under pressure from regulators and advocacy groups, financial institutions are increasingly denying banking services to individuals, organizations, and entire industries. The critical points around debanking that I feel have been lost in the narrative are as follows:

0. Overview

A. Aligning on a definition of debanking

Debanking is not a binary construct. Rather, it is the pervasive attempt to limit financial access to a specific industry, as opposed to taking a risk-based approach to each player in that space. The fact that Zero Hash and other Tier 1 players in the stablecoin and crypto space have strong banking partners does not preclude the existence of “debanking.” Specifically, we have multiple top 20 banks where we hold Customer and Operational Funds.

The counter I have heard is that banks can rightly establish a risk based approach as to who they service. However, what is different here is:

• Highlighting industries is in direct contradiction to the guidance issued by the OCC (see here for an example) which explicitly states that it does not allow for broad, categorical discrimination against businesses engaged in lawful activities.
• The FDIC was attempting to unilaterally pre-determine a bank’s risk profile, as opposed to allowing the bank to establish this itself. A regulator establishing a risk profile for legal businesses is contrary to the OCC’s longstanding instruction that supervised banks should make decisions on depository accounts based on the bank’s own risk assessment applied to all customer accounts. This is an extreme form of “regulation by implication” (a term I coined in a recent @edward_zerohash/potential-stablecoin-crypto-policy-changes-in-the-year-ahead-9f5e389219b4">blog), whereby it is made clear that certain activities would incur substantial scrutiny, triggering a burden so great that it effectively dissuaded certain activities not prohibited by law.

B. Debanking is a fact

• There is, of course, the obvious impact of debanking, where we have had bank accounts closed with single-day notices, including from partners we had been working with since 2017.
• It has ranged to the ridiculous. We were nominated for an award, and the nominee’s dinner was sponsored by a bank. I was uninvited at the bank’s request because “paying for my dinner could be misconstrued.”
• We run a multi-jurisdictional business. The same bank will bank all our non-U.S. subsidiaries but not our U.S. entity. Same owners, same risk profile.
• Over the past 18 months, of the 120+ banks we proactively reached out to, roughly 80% declined to engage in any form of substantive discussions (to unpack a more detailed review of the risk profile) purely on the basis of the industry we operate in.

c. Why should anyone care?

• Is it right? Banking is essential for modern life (and any business), and denying access arbitrarily raises constitutional and ethical concerns.
• Higher fees. There is inherently less competition, which distorts the markets.
• Creates concentration risk. Fewer banks capable of serving an industry create concentration risk, inherently driving more risk into the customer base.

Andreessen used the term “Operation Choke Point 2.0,” (originally coined by Nic Carter), drawing parallels to the controversial Obama-era initiative where regulators pressured banks to sever ties with lawful but politically disfavored industries. Today, this trend has expanded, with sectors like crypto being de-banked not for illegal activities but due to reputational concerns or political pressures.

Banking, long considered a neutral utility, has become a battleground for cultural, political, and economic conflicts. The question we must ask is: when financial access becomes weaponized, who decides who gets to participate in the modern economy?

1. The Rise of Debanking in the Public Eye

Since Andreesen’s appearance on November 26th, the conversation has accelerated:

• Nov 29 — David Marcus, former PayPal president and co-founder of Lightspark, shared a post about how political pressure killed Libra, Meta’s stablecoin project. Elon Musk reacted to Marcus’ post with “wow,” and Coinbase CEO Brian Armstrong shared Marcus’ post, adding, “Makes sense — the government pressured the banks (again).”
• Dec. 4 — Congressman French Hill addressed the debanking of the crypto industry in Congress, pledging to “halt, reverse, and investigate Operation Choke Point 2.0.”
• Dec. 6 — Former Silvergate CTO Chris Lane shared his experiences with regulatory pressure in crypto banking, catching the attention of David Sacks, who shared Lane’s post with the comment, “There are too many stories of people being hurt by Operation Choke Point 2.0. It needs to be looked at.”
• Dec. 6 — Court documents filed in a lawsuit against the FDIC disclosed letters that the agency had sent asking banks to pause crypto-related activities. “The letters that show Operation Chokepoint 2.0 wasn’t just some crypto conspiracy theory,” says Coinbase CLO, Paul Grewal.
• Dec. 10 — The New York Times published an article by Erin Griffith and David Yaffe-Bellany analyzing how debanking has quickly become a “political cudgel.”
• Dec. 19 — SEC Commissioner Hester Peirce voted against approving the Public Company Accounting Oversight Board’s (PCAOB) $400M budget, citing concerns about its “regulatory efforts to dissuade regulated entities from serving the crypto industry and its participants or otherwise engaging in crypto” in her comments. Despite Peirce’s dissent, the budget was approved by three other commissioners, including SEC Chair Gary Gensler.

2. Is Banking a Right?

Banking is a service provided by private enterprises. Yet, in an economy where nearly all transactions rely on access to financial infrastructure, this service operates much like a utility. Without it, participating in modern life — whether paying bills, receiving wages, or accessing credit — is virtually impossible.

In his conversation with Rogan, Andreesen argued that debanking could violate constitutional rights. If banking access is essential to economic participation, denying it arbitrarily — or under opaque political pressures — could constitute a deprivation of a fundamental right. While there is no explicit constitutional right to banking, legal precedent has established financial activity as closely tied to fundamental rights like free speech and due process.

The foundation for these debates lies in cases like Buckley v. Valeo (1976) and Citizens United v. Federal Election Commission (2010). Both rulings emphasized that money, as a medium of expression, is protected by the First Amendment. While these cases centered on campaign finance, they establish a principle: the ability to use financial resources is critical to participation in public discourse. If financial access is denied arbitrarily, it could amount to silencing lawful voices.

The Fifth and Fourteenth Amendments’ guarantees of due process offer another lens: in Goldberg v. Kelly (1970), the Supreme Court ruled that government benefits integral to an individual’s livelihood could not be terminated without due process. While banking is provided by private institutions, its essential role in modern life aligns it with utilities, suggesting that arbitrary denial could violate due process protections.

The question of financial neutrality, particularly the issue of debanking, has been tested as recently as this year. In NRA v. Vullo (2024), the Supreme Court unanimously ruled that the Superintendent of the New York Department of Financial Services could not use her authority to pressure banks and insurers into cutting ties with the NRA. Justice Sonia Sotomayor wrote that while regulators can express opinions, they cannot coerce financial institutions to discriminate against lawful entities based on political advocacy.

These rulings affirm that financial exclusion — whether due to direct government coercion or indirect reputational pressures — raises significant constitutional questions. As Andreessen noted on The Joe Rogan Experience, “There’s probably a Supreme Court case in five years that is going to find, retroactively, that this was all illegal.”

3. A Legal Business Is a Legal Business

At its core, debanking raises a straightforward question: if an entity is operating within the law, should it have access to banking? The answer seems obvious — yet the trend toward debanking lawful businesses suggests otherwise.

This should be an apolitical statement. The OCC has issued guidance (see here for an example) that it does not allow for broad, based categorical discrimination to businesses engaged in lawful business activities.

Excluding compliant businesses from essential financial services is a slippery slope — one that risks embedding subjective bias into the backbone of modern economic infrastructure. If the financial system picks and chooses which lawful entities it supports, it ceases to be a neutral platform and instead becomes a tool for enforcing political or cultural agendas.

Fair access isn’t about forcing banks to take on undue risk. It’s about ensuring the financial system remains inclusive and neutral, providing all lawful businesses with the ability to operate. Without this neutrality, we risk turning banking into a gatekeeping mechanism that stifles innovation and undermines trust in one of society’s most critical systems.

4. Zero Hash: A Case Study in Regulatory Overreach

At Zero Hash, we’ve encountered these challenges firsthand. Despite operating with the highest standards of regulatory compliance — standards that have earned us the trust of 75+ institutions, including Interactive Brokers, Stripe and Franklin Templeton — we’ve faced significant barriers to securing and maintaining banking relationships.

Our extensive licensing underscores our commitment to transparency and compliance. We are licensed to operate in 200+ jurisdictions worldwide, including all US states and territories. Our licensing in the United States includes:

• New York Bitlicenses: one of the most stringent regulatory frameworks for virtual currency business.
• Money Transmitter Licenses (MTLs): Enabling us to operate in all 52 US jurisdictions (50 US states plus DC and Puerto Rico) and ensuring compliance with state-level requirements for money service businesses.
• FinCen Registration as a Money Service Business (MSB): compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) obligations under federal law.

Even with licensing that rivals or exceeds that of traditional financial institutions, banks remain hesitant to work with us. Of the 120+ banks we proactively reached out to over the past 18 months, roughly 80% declined to engage in any form of substantive discussions purely on the basis of the industry. Among those who did, only half proceeded to due diligence.

The issue is less pervasive in Europe. International banks that eagerly wish to work with us abroad flat-out refuse to do so in the United States. The irony? It’s the same bank, dealing with the same company, under the same risk profile — but US regulation and politicians have created barriers that don’t exist elsewhere. This discrepancy illustrates the chilling effect of unclear regulatory frameworks and overreach, which actively discourage innovation in the United States and force companies to look elsewhere to build the future.

5. The Stakes for Financial Neutrality

Debanking is not just a logistical hurdle — it’s a direct challenge to the principles of fairness, freedom, and trust that underpin our financial system. This isn’t just about crypto; it’s about safeguarding access to modern financial infrastructure for everyone.

Disclaimer:

1. This article is reprinted from [Edward Woodford], All copyrights belong to the original author [Edward Woodford]. If there are objections to this reprint, please contact the Gate Learn “Gate Learn”) team, and they will handle it promptly.
2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. Translations of the article into other languages are done by the Gate Learn team. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.