In a recent Joe Rogan interview, Mark Andreesen stated that the debanking of tech firms pushed Silicon Valley to lean toward Trump.
David Schwartz, Chief Technology Officer of Ripple, has joined the growing list of tech leaders speaking out against Operation Chokepoint 2.0—a government-led initiative targeting the crypto industry through debanking practices.
Schwartz criticized the operation, accusing the government of being “addicted to indirect regulation” and highlighting four ways he believes debanking undermines the rule of law.
Schwartz’s Argument Against Debanking
Schwartz argued that debanking drives affected entities to switch service providers or move their funds underground, thereby avoiding oversight and sanctions enforcement.
He also claimed that debanking undermines fundamental rights, including due process, freedom of speech, and protection against unlawful search and seizure.
In a pointed critique, Schwartz wrote:
“Our government has become addicted to indirect regulation precisely because of these evils. It is cheaper and easier to pressure someone else to punish me than to charge me with a crime and give me due process, but the government ought not to punish people without giving them due process.”
He added: “It is easier to pressure banks to cut off disfavored businesses than to make that business illegal,” urging the government to adopt lawful and transparent methods for regulating industries.
Founders Share Experiences With Operation Chokepoint 2.0
Venture capitalist Mark Andreesen reported that over 30 tech firms have been targeted by Operation Chokepoint 2.0, prompting tech founders to share their experiences with debanking on social media.
Frax Finance founder Sam Kazemian revealed that JPMorgan Chase cut off his banking access in December 2022.
Similarly, Coinbase CEO Brian Armstrong has submitted a Freedom of Information Act (FOIA) request to obtain government records related to the operation and is actively reviewing them.
In September 2024, Nic Carter, a partner at Castle Island Ventures, claimed that the Biden administration deliberately caused the collapse of Silvergate Bank, a critical institution for crypto banking, to undermine the industry.
Carter stated, “I believe Silvergate could have survived its drawdown — and was on a path to do so.”
Despite these challenges, industry leaders are optimistic that the upcoming Trump administration may reverse the perceived regulatory hostility and adopt a more supportive stance toward the crypto sector.
