Debanking—when a bank chooses to terminate a customer’s account—has become a contentious issue, fueled by claims from individuals and businesses who allege their accounts were closed due to their political affiliations.
The practice appears to disproportionately affect high-profile conservatives and cryptocurrency companies, which often face increased regulatory scrutiny. Former First Lady Melania Trump revealed in her memoir that she and her son Barron were denied bank accounts following the events of January 6.
“I was shocked and dismayed to learn that my long-time bank decided to terminate my account and deny my son the opportunity to open a new one,” Trump wrote.
She blamed the “venom of cancel culture” and said she had “serious concerns about civil rights violations”.
Conservative author Dinesh D’Souza alleged last month that Chase Bank closed his account without providing a reason.
“Walked in one day to discover they had closed my account,” D’Souza shared on X. “The local branch couldn’t understand it since I was a good and known customer. They said the order came from the top with no explanation given or even available!”
Debanking occurs when an individual or business is denied access to a bank account at one or more institutions, often with little or no explanation. This exclusion can extend to other financial services, such as processing credit card transactions or using payroll platforms. Without access to traditional banking, individuals or businesses may have to turn to costly alternatives, like check-cashing services with high fees and interest rates.
In addition to financial challenges, debanking can damage a person’s or company’s reputation.
Critics argue that debanking mirrors the type of censorship seen with Big Tech, allegedly influenced by government directives during recent presidential elections.
Marc Andreessen, a tech billionaire and founder of the venture capital firm Andreessen Horowitz—which invests in numerous crypto companies—discussed the issue on Joe Rogan’s podcast. He claimed that the Biden administration has used debanking as a tool to target political opponents and crypto entrepreneurs.
“We’ve had like 30 founders debanked in the last four years,” he told Rogan. “It’s been a big recurring pattern. This is one of the reasons why we ended up supporting Trump. We just can’t live in this world. We can’t live in a world where somebody starts a company that’s a completely legal thing and then they literally get sanctioned and embargoed by the United States government.”
The Biden administration’s actions have expanded on the Obama administration’s practice of debanking certain legal businesses—including gambling, marijuana, prostitution, and gun shops—under a program called Operation Choke Point, Andreessen said.
“This administration extended that concept to apply it to tech founders, crypto founders, and just generally political opponents. So that’s been super pernicious,” Andreessen remarked.
Andreessen explained that while the First Amendment protects speech, there is no constitutional amendment preventing the government from debanking individuals. Instead, the government pressures private banks, which comply because they rely on the government to operate.
“The government gets to say, ‘we didn’t do it,’” Andreessen said, noting that this system “lets bureaucrats do to American citizens the same thing we do to Iran, just kick you out of the financial system.”
“It’s just raw administrative power,” he added.
Following Andreessen’s comments, several crypto founders shared their experiences with being debanked.
Elon Musk, who recently faced political discrimination against his SpaceX rocket launches by a California regulator, also criticized the practice, calling for it to be made a federal crime to debank political opponents. Musk described debanking as evidence of “just how evil the government has been.”
Critics have primarily blamed the Federal Deposit Insurance Corporation (FDIC) for the debanking efforts, while also pointing to the Department of Justice, the Office of the Comptroller of the Currency, the Federal Reserve Board, and the Consumer Financial Protection Bureau.
Earlier this month, the crypto industry presented what it claims is solid evidence of federal regulators targeting them. Documents obtained by the crypto platform Coinbase during a legal battle revealed that in 2022, the FDIC blocked crypto companies’ banking activities at numerous institutions.
“We respectfully ask that you pause all crypto asset-related activity,” the FDIC wrote to banks in one instance.
Proponents of stricter regulations on crypto argue their goal is to prevent risky businesses from operating. Last year, the White House also encouraged banks to separate “risky digital assets from the banking system.” This sentiment was echoed by Sen. Elizabeth Warren (D-MA), who faced criticism for pledging to create an “anti-crypto army.”
Despite these challenges, the crypto industry remains optimistic about the future.
President-elect Donald Trump has vowed to turn the United States into the “crypto capital of the planet” and acknowledged the issue of debanking during his campaign.
“They target your banks. They choke off your financial services,” Trump said at a Bitcoin conference in Nashville in July.
Earlier this month, Trump appointed venture capitalist David Sacks as the White House AI and Crypto Czar. Sacks, who previously criticized PayPal’s 2017 ban on accounts deemed to belong to right-wing extremists, is expected to influence policies favoring the crypto industry.
Conservatives have raised additional concerns about alleged bias in the banking system. For example, following the January 6 Capitol riot, the Financial Crimes Enforcement Network instructed banks to search for “suspicious charges” linked to terms such as “MAGA” and “Trump,” as well as references to guns and religious texts.
Under a new Trump administration, conservatives hope that regulators will be less inclined to target them via the banking system. Trump has promised to implement “strong protections to stop banks and regulators from trying to debank you for your political beliefs.”
