The entire cryptocurrency industry faces the threat of debanking under Operation Chokepoint 2.0. Jason Lau, chief innovation officer at cryptocurrency exchange and self-custodial wallet provider OKX, told Cointelegraph that fostering relationships with banks and keyholders is a hedge against debanking.
Lau said the traditional financial world is heavily based on trust, and building relationships with banking institutions, financial regulators and other stakeholders is key to maintaining strong partnerships. Lau told Cointelegraph in an interview:
“We need to invest time building relationships with all stakeholders, including regulators and banking partners. We have been working with our partners and stakeholders for many years to help them understand our business.”
Much of the debanking talk about Operation 2.0 came from the United States and U.S.-based institutions. However, banking disruptions remain a global problem affecting business, technological innovation, and freedom of speech.
A significantly revised FDIC notice asking banks to pause cryptocurrency-related activities. source: FDIC
relevant: Ledn co-founder shares how cryptocurrency startups can avoid debanking.
Debanking around the world
According to Ben Rose, former regional manager at Binance Australia, the exchange was notified 12 hours before it was de-banked. Rose claimed the reason for the sudden withdrawal from the bank, which occurred in the middle of the night, was unclear.
In July 2023, leaked documents revealed that British politician Nigel Farage was kicked out of his bank account due to his political views. This has led British politicians to propose stripping banks of their licenses if they violate freedom of expression.
The UK government has put in place a number of consumer protection provisions for banks, including giving customers three months’ notice before account closure, explicit reasons for account closure and the opportunity to appeal closure.
Cryptocurrency companies have also reported being rejected by UK banks for 2023. Common problems included excessive paperwork, account freezes, and application rejections without sufficient reasons.
The problem is so widespread that cryptocurrency industry executives brought it to the attention of former British Prime Minister Rishi Sunak. However, cryptocurrency companies and projects are still reporting the same issues in 2024.
Debanking was also nominated for Collins Dictionary Word of the Year in 2023 thanks to its widespread use worldwide in online circles and digital culture.
magazine: Proposal to regulate cryptocurrencies in the U.S. amid fears and doubts from lawmakers