Why Marc Andreessen and Silicon Valley billionaires are talking about debanking

Venture capitalist Marc Andreessen’s recent appearance on The Joe Rogan Experience podcast introduced many to the concept of debanking. In essence, this is when bank accounts get closed by the bank rather than the customer. However, during the podcast the tech billionaire described debanking as a “privatized sanctions regime” targeting unpopular political groups, notably, conservatives, crypto and fintech founders, turning the talking point into a political cudgel.

Within his own VC firm alone, Andreessen said 30 tech founders have been debanked. His claims prompted prominent crypto industry figures like David Marcus, Jesse Powell, Sam Kazemian, and Tyler Winklevoss to share their own experiences with debanking online. Sid Kalla, co-founder of Roll Labs, posted a cancellation notice from Chase on X, claiming the bank ended a seven-year relationship with no explanation. The loss left his company without a checking account for weeks, delaying paychecks for 12 employees.

Elon Musk said on X that debanking is an example of “how evil the government has been” and that it should be a federal crime if it’s politically motivated. Banks refusing to open accounts for certain individuals or organizations is neither new nor unusual and is entirely within their rights. This practice can impact a broad range of individuals and organizations, not just those in the cryptocurrency space. However, the recent uproar over debanking has struck a chord with crypto enthusiasts and right-wing activists, who allege it’s driven by federal regulators pressuring banks to shun crypto-related clients.

Now back in conversation, claims of debanking first gained traction during the Biden administration, as the government intensified its crackdown on the crypto industry, citing widespread fraud and criminal activity. The FDIC reportedly pressured banks to limit crypto-related deposits to no more than 15% of their total, aiming to mitigate these risks. Andreessen’s pushback against these regulations is not entirely altruistic, with his venture capital firm heavily invested in crypto. For his investments to thrive, he advocates for loosening regulations that he sees as hindering the industry’s growth.

The Office of the Comptroller of the Currency (OCC), which oversees national banks, made it clear that banks are expected to assess customer risks individually. In a statement reported by NBC News, the OCC said, “The OCC does not direct banks to open, close, or maintain individual accounts. Nor does it recommend or encourage the wholesale termination of categories of customer accounts.”