Crypto and Trump gang up on FDIC over debanking: ‘Our story is pretty ridiculous’

Anchorage Digital CEO Nathan McCauley wants everyone to know what happened to his crypto company in 2023 during the Biden administration.

“Our story is pretty ridiculous,” McCauley told CNBC in an interview after testifying at a Senate hearing, titled, “Investigating the Real Impacts of Debanking in America,” earlier this month. “We had a bank that we had a growing relationship with for a number of years, who basically on a dime, decided to turn off our bank account.”

No explanation. No warning. After two years working with the bank, access was cut off. He didn’t name the bank and an Anchorage spokesperson said the company is declining to provide it.

McCauley’s peers across the crypto industry have shared similar sagas about being locked out of the U.S. financial system, losing access to payroll, checking accounts and payment processing. Industry leaders call it “Operation Choke Point 2.0,” an alleged coordinated effort by regulators during the Biden presidency to pressure banks into severing ties with crypto. The 1.0 version, they say, occurred when the Obama administration went after banks that backed gun manufacturers and payday lenders.

With the word “debanking,” crypto execs and investors have found immediate allies among top Republicans in both houses of Congress and in the White House, who are ready and willing to investigate any potential malfeasance that occurred when Democrats were in charge.

President Donald Trump has coopted the agenda for political gain. At the World Economic Forum in Davos, Switzerland, last month, he accused JPMorgan Chase and Bank of America of politically motivated debanking, claiming major financial institutions have shut out conservatives under pressure from regulators. The banks denied the claim and Trump hasn’t provided any evidence to back it up.

Sen. Rick Scott (R-Fla.) has tied himself closely to Trump and, as chairman of the Senate Banking Committee, used his opening remarks at the hearing on Feb. 5, to echo the president’s sentiment.

“It is incredibly alarming and disheartening to hear stories about financial institutions cutting off services to digital asset firms, political figures, and conservative-aligned businesses and individuals,” Scott said.

For crypto industry leaders like McCauley, Republican leadership in Washington has provided a platform to publicly air their grievances.

McCauley, whose company is a federally chartered crypto bank, recounted Anchorage’s abrupt loss of banking services in June 2023. He said that while his company has faced numerous challenges, the environment has been even worse for less-established startups.

“You can only imagine what was happening to the smaller entrepreneurs who didn’t have the resources to be able to marshal in order to keep their bank accounts open,” McCauley told CNBC.

In his testimony to Scott’s committee, McCauley said that after losing access to its banking services, Anchorage had to lay off 20% of its workforce, including 70 U.S. employees. To this day, clients are unable “to send wire transfers to third parties,” he said.

The high-profile hearings so early in Trump’s second administration underscore the sudden influence of the crypto industry, which was instrumental in getting its favored candidates elected across the country in November.

Crypto exchange Coinbase was one of the top corporate donors in the 2024 election cycle, giving more than $75 million to a group called Fairshake and its affiliate PACs, including a fresh pledge of $25 million to support the pro-crypto super PAC in the 2026 midterms. Ripple doled out around around $50 million.

Coinbase and Ripple were both involved in protracted legal battles with the SEC under former Chairman Gary Gensler.

Trump is paying them back in a variety of ways.

His executive order on crypto promises “fair and open access” to financial services. And Trump appointed venture capitalist David Sacks, a longtime ally of Elon Musk, as the White House’s first AI and crypto czar.

Meanwhile, the SEC has already signaled a rollback of rules that previously kept banks from holding bitcoin on their balance sheets, and the FDIC is under pressure to revise guidelines that made it harder for banks to serve digital asset companies.

Coinbase Chief Legal Officer Paul Grewal testified before the House Financial Services Committee on Feb. 6, along with Fred Thiel, CEO of bitcoin miner MARA Holdings. In a hearing titled “Operation Choke Point 2.0: The Biden Administration’s Efforts to Put Crypto in the Crosshairs,” they described aggressive pressure from U.S. regulators to effectively push banks to cut ties with crypto firms.

“No one wants to see anyone denied basic banking services on the basis of their political views or whether they happen to work in an industry that might be out of favor with the current administration,” Grewal told CNBC. “There are concerns across the political aisle and across the Congress that banking services have in the past been weaponized in order to run roughshod over those who may be out of favor.”

The FDIC last week released hundreds of pages of internal records obtained through Freedom of Information Act (FOIA) requests. The documents show that the regulator sent “pause letters,” urging banks to rethink their relationships with crypto clients.

Nic Carter, founder of Castle Island Ventures, has spent months chronicling revelations in the Choke Point investigation. He said the FDIC records show that banks were being pressured to avoid crypto clients even in the absence of clear laws.

“Ultimately, the smoking gun is the communications between the regulators and the banks themselves,” Carter said

As part of its probe, the House committee is investigating claims that bank executives and financial regulators secretly blacklisted crypto firms.

Thiel, in his testimony, said that the “discriminatory banking and financial policies threaten the digital asset ecosystem” and that “banks and payment processors are effectively deciding which industries can exist and grow within the U.S. economy.”

Among the Choke Point incidents that most caught the ire of crypto investors were the forced closures of Silvergate Bank and Signature Bank in 2023, following the meltdown at Sam Bankman Fried’s FTX months earlier. Silvergate and Signature were the leading FDIC-insured banks for crypto firms.

Silvergate Capital, the bank’s parent, acknowledged in its bankruptcy filing last year that there had been a “rapid contraction” of it business in early 2023, but said it had “stabilized” and was able to “meet regulatory capital requirements” and “had the capability to continue to serve its customers.”

Silivergate attributed its insolvency to “increased supervisory pressure on Silvergate and other banks focused on servicing crypto-asset businesses.”

Signature Bank was seized by regulators in March 2023. Former Democratic Congressman Barney Frank, a Signature board member, claimed that the FDIC shut it down specifically “to send a very strong anti-crypto message.” The FDIC arranged a sale of Signature’s assets, excluding $4 billion in crypto-related deposits.

Mike Lempres, who was chairman of Silvergate and previously spent two years as Coinbase’s legal chief, wrote in an opinion piece in the Wall Street Journal this week that the “federal government is finally changing course after four years of vilifying cryptocurrencies and using legally dubious policies to force companies to bend to its will.”

While the crypto industry at large is rallying around that message, many in Congress are focused on making the case that banks were targeting conservatives for their political views. Carter said lawmakers are trying to reach a wider audience because “most regular folks don’t care about crypto.”

“I think this was a political choice made by the folks in Congress and the administration that are going after debanking, was to tack on the conservative stuff as well,” Carter said. “So it became an issue with a much broader appeal.”

For Trump, there’s more to gain from crypto than just political points. There’s potentially lots of money involved.

Before he was even back in office, Trump and First Lady Melania Trump had already launched meme coins that instantly added billions of dollars in paper value to the family’s net worth, in addition to the tens of millions of dollars the projects earned in trading fees.

A week into his term, Trump launched Truth.Fi, a financial arm of Trump Media, promising ETFs, cryptocurrency investments, and “Patriot Economy” assets — all custodied with $250 million at Charles Schwab.

Musk, meanwhile is at the center of the Trump administration and has his own project underway. He’s positioning his social media platform X as an alternative online bank, enabling users to move funds between traditional bank accounts and their digital wallets to make instant peer-to-peer payments.

The good vibes are being expressed across the industry.

“it’s a brand new day for crypto in America,” said David Marcus, the former head of crypto at Meta and current CEO of infrastructure startup Lightspark, in an interview with CNBC’s “Squawk Box” last week. What’s happening under Trump, he said, is “quite a polarity flip of atmosphere and energy for our entire industry.”

WATCH: Lightspark CEO David Marcus on the new era for crypto