The entire crypto industry faced threats of debanking under Operation Chokepoint 2.0. Jason Lau — the chief innovation officer at crypto exchange and self-custody wallet provider OKX — told Cointelegraph that fostering relationships with banks and keyholders was a hedge against debanking.
Lau said the traditional financial world is heavily based on trust and that relationship-building with banking institutions, financial regulators, and other stakeholders was key to maintaining solid partnerships. Lau told Cointelegraph in an interview:
“You need to take the time to build relationships with all your stakeholders, including regulators and your banking partners. We’ve spent years and years working with our partners and stakeholders to make sure they understand our business.”
Many Operation 2.0 debanking stories came from the United States and US-based entities. However, debanking remains a global problem with implications for business, technological innovation, and freedom of speech.
A heavily redacted FDIC notice asking a bank to pause crypto-related activities. Source: FDIC
Related: Ledn co-founder shares how crypto startups can avoid debanking
Debanking around the world
According to the former regional manager of Binance Australia, Ben Rose, the exchange received only 12 hours’ notice before being debanked. Rose claimed that the reasons for the abrupt debanking, which occurred in the middle of the night, were unclear.
In July 2023, leaked documents revealed United Kingdom politician Nigel Farage was debanked due to his political views. This caused UK politicians to propose stripping banks of their licenses if the banks violated freedom of speech.
The UK government laid out several consumer-protection provisions for banks, including a three-month notice to customers before account closures, an explicit reason for account closure, and a chance to appeal the closure.
Crypto companies also reported being turned away by UK banks in 2023. Common problems included excessive paperwork, account freezes, and application rejections without sufficient reasons.
The problem was so widespread that crypto industry executives brought the issue to the attention of former UK prime minister Rishi Sunak. However, crypto firms and projects are still reporting the same issues in 2024.
Debanking even made the Collins Dictionary shortlist for words of the year in 2023 due to the widespread usage of the world in online circles and digital culture.
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