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Coinbase’s Brian Armstrong and Elon Musk assert that actions by Biden officials have instigated a “mass debanking” campaign against the tech and crypto sectors.
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Armstrong correlates these regulatory pressures with electoral setbacks for the Democratic Party, advising them to dissociate from Senator Warren.
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Custodia Bank’s CEO, Caitlin Long, emphasizes ongoing legal conflicts stemming from perceived regulatory overreach, with key arguments scheduled for 2025.
This article explores allegations of a “mass debanking” campaign against tech and crypto, highlighting key figures’ responses and implications for U.S. policies.
Crypto Leaders Strong Rebuke of the Biden Administration
In a post on X (formerly Twitter), Brian Armstrong characterized the debanking incidents as “unethical and un-American,” directly implicating political figures such as Elizabeth Warren and Gary Gensler in what he describes as an effort to “unlawfully kill” the budding cryptocurrency industry.
In his statements, Armstrong posits that such actions may have played a significant role in the Democratic Party’s losses in recent elections. He argues that for the party to have a chance at recovery, it must sever ties with Warren, whom he sees as detrimental to its prospects.
Armstrong has initiated a campaign using Freedom of Information Act (FOIA) requests to reveal the extent of these alleged activities, which raises serious questions about potential violations of the law.
“We’re still collecting documents via FOIA requests, so hopefully the full story emerges of who was involved and whether they broke any laws. Warren and Gensler tried to unlawfully kill our entire industry, and it was a major factor in the Dems losing the election,” Armstrong indicated.
His remarks have gained traction, mirroring sentiments expressed by Elon Musk, who is known for his vocal advocacy for innovation and free speech. Musk referenced a recent interview with Marc Andreessen, co-founder of Andreessen Horowitz, to shed light on these issues.
“Did you know that 30 tech founders were secretly debanked?” Musk remarked, bringing to the forefront allegations made by Andreessen regarding the behind-the-scenes withdrawal of banking services.
In the interview, Andreessen revealed that 30 tech founders experienced “secret debanking,” framing it as a manifestation of “silent government power,” which could have severe implications for the freedom and entrepreneurial spirit that underpin the tech and crypto ecosystems.
Custodia Bank’s Caitlin Long Joins the Criticism
Caitlin Long, founder and CEO of Custodia Bank, joined the chorus of criticism, detailing her own experiences with systemic debanking. Custodia, a bank supportive of cryptocurrency, has encountered numerous regulatory obstacles, leading to layoffs that she attributes directly to the Federal Reserve’s delay in granting the institution a master account.
Long’s ongoing litigation against the Federal Reserve seeks to confront these regulatory hurdles, with oral arguments set to commence on January 21, 2025, coinciding closely with the inauguration of the new administration.
“Yes—debanked repeatedly, in my company’s case (Custodia Bank). Keep an eye on our pending lawsuit against the Fed. Oral argument is scheduled for Jan 21 (the day after Inauguration Day),” Long noted, highlighting the personal impact of regulatory actions.
The broader implications of these allegations center around growing concerns over regulatory overreach in the cryptocurrency sector. Warren and Gensler have been outspoken critics, with the SEC pursuing various enforcement actions against numerous crypto companies, drawing criticism for potentially stifling innovation and disproportionately targeting the sector.
Custodia Bank’s plight and others like Consensys demonstrate the significant challenges crypto-friendly financial institutions currently face. The ramifications of these allegations could dramatically alter the dynamics between tech innovators and U.S. policymakers.
Armstrong’s assertion regarding the impact these actions had on the Democrats’ electoral performance underscores the potential political risks of distancing the tech and crypto communities. Long’s lawsuit may set pivotal precedents regarding regulatory actions, shaping the future landscape of regulatory engagement with emerging technologies.
Conclusion
This unfolding narrative not only signifies a critical moment for the cryptocurrency sector but also reflects broader tensions between technology, regulation, and political accountability in the United States. The coming months will be critical in determining how these issues are addressed, both in courts and in political arenas. As the battle over the future of crypto regulation intensifies, industry leaders and policymakers must navigate these challenges with a focus on fostering innovation while ensuring compliance with necessary regulations.
