The US crypto industry is accusing regulators of a targeted crackdown amid the debanking crisis, which has left several crypto companies without access to traditional banking services. Anchorage Digital, a chartered crypto-bank with the OCC since 2021, testified before a Senate committee on Wednesday that it was unfairly denied services by banks.
For 2.5 years, Anchorage enjoyed a positive relationship with its bank, but in June 2023, its account was closed without explanation or opportunity to appeal. The company sought services from over 40 other banks but was refused by all of them. Anchorage believes regulators are behind the sudden shift in behavior.
The Joint Statement from the Fed, FDIC, and OCC in January 2023 detailed key risks tied to digital assets that banks should be aware of. While it said banking organizations “are neither prohibited nor discouraged from providing banking services,” it also warned of closely monitoring and reviewing banks with crypto-asset-related exposures.
Anchorage’s CEO, Nathan McCauley, stated that many big banks were in active conversation with his company before the account was closed, suggesting that the pushback was not coming from banks. Sen. Elizabeth Warren questioned McCauley about the decision, stating she didn’t believe Anchorage should have been denied services.
Reputational risk is a concept introduced in banking supervision in the 1990s, which has become increasingly subjective and prone to abuse. Regulators can now find reputational risk “almost wherever they choose to look,” according to attorney Stephen Gannon. The committee will likely delve deeper into these issues in future hearings.
The House Financial Services committee is also holding a hearing on this topic later Wednesday, addressing concerns about transparency, suspicious activity reports, and the use of CheX Systems to deny banking services to consumers.
Source: https://www.axios.com/2025/02/06/crypto-debanking-anchorage-senate