Market Update

The US House of Representatives Oversight Committee launches an investigation into allegations of technology and cryptocurrency banking break-ups

Top line

The US House Committee on Oversight and Government Reform is investigating alleged “improper banking transactions” by individuals and organizations based on political affiliations or involvement in cryptocurrency and blockchain technology, according to a new report. letter The committee sent it to industry leaders on Friday.

Basic facts

The committee, chaired by James Comer (R-Ky.), seeks to collect testimony from individuals and businesses who have gone through bankruptcy — the practice by which a bank restricts or closes a customer’s account — to understand the personal and operational consequences of losing their accounts. Financial services.

The investigation will determine whether the trend toward de-banking stems from independent decisions made by financial institutions or through government overreach in “arbitrarily silencing industries not favored by regulators.”

The Oversight Committee aims to protect entrepreneurs from unfair targeting and ensure that all Americans are able to engage in US markets without fear of retaliation from financial companies or federal regulators.

The letter names six digital asset leaders who have spoken publicly about going bankable: Marc Andreessen, co-founder and general partner at Andreessen Horowitz; Hayden Adams, Founder and CEO of Uniswap Labs; Brian Armstrong, co-founder and CEO of Coinbase; David Marcus, co-founder and CEO of Lightspark; Dave Ripley, CEO of Payward and Christine Smith, CEO of the Blockchain Association.

The committee also cites First Lady Melania Trump’s memoir, in which she revealed that her longtime bank abruptly terminated her account, which it believes was motivated by political discrimination.

Big number

Modern Wall Street Journal The survey reported that approx 120 cryptocurrency hedge funds They have faced difficulties accessing basic banking services in the past three years, while alternative investors in real estate and private credit have not faced the same banking challenges.

Main background

In Joe Rogan Podcast interview In November, Andreessen claimed that more than 30 tech and cryptocurrency startup founders secretly filed for bankruptcy during the previous Biden administration, as part of the so-called “Operation Chokepoint 2.0.” Andreessen compared this measure to the Obama era.Choke Point operation“, which aims to restrict financial services to high-risk industries.

The CEO of Coinbases confirmed Andreessen’s claims X“This can be confirmed,” he said. In addition, Paul Grewal, chief legal officer at the cryptocurrency exchange, to publish On the social media platform, “financial regulators have used multiple tools at their disposal to try to cripple the digital asset industry.”

The practice of bank break-ups can have serious consequences for targeted companies. It disrupts their ability to manage money and pay their employees on time. It creates barriers to entry into the technology industry due to fear, which can reduce competition and limit innovation. Debanking sends a worrying signal to the market, investors and potential partners, indicating potential risks or compliance issues. This perceived risk can significantly damage a company’s reputation and undermine investor confidence. As a result, affected companies often face increased challenges in securing financing, attracting top talent, and forming strategic partnerships that are essential for growth and success.

Further reading

ForbesAs Congress hesitates, Coinbase turns to the courts to save cryptocurrencies

ForbesHow can tech and cryptocurrency companies kill companies?

https://imageio.forbes.com/specials-images/imageserve/6792e910acd82d2963e5c511/0x0.jpg?format=jpg&crop=4069,2289,×0,y0,safe&height=900&width=1600&fit=bounds

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button