Inside the US War on Crypto: Voices from the Industry

Marc Andreessen Blasts Biden Administration Over Crypto Policy

Marc Andreessen, celebrated investor and co-founder of Andreessen Horowitz, criticized the Biden administration during an episode of The Joe Rogan Experience. He accused the administration of employing regulatory and financial strategies to crush the cryptocurrency sector, a move he claims has inflicted damage on entrepreneurs, investors, and emerging startups.

Marc Andreessen on The Joe Rogan Experience. Source: Youtube

The Crypto Industry Under Pressure

Andreessen contends that the Biden administration actively worked to undermine the crypto industry by leveraging SEC probes and cutting off banking services. He pointed to the use of Wells notices, calling them tools that leave companies mired in legal uncertainty.

Try to be a company with a Wells notice… Try to work with a big company, try to get access to a bank,

he said.

Related reading: Coinbase receives SEC warning

He went on to highlight that several companies have been forced out of business due to banking denials or threatened lawsuits. According to Andreessen, around 30 startup founders have been “cut off” from financial systems in the last four years.

Banks and “Choke Point 2.0”: The New Targets

Andreessen drew comparisons to “Choke Point,” a controversial Obama-era initiative that targeted banks working with legal yet “high-risk” industries, such as gun dealers, marijuana businesses, and small lenders. These sectors, though operating within legal boundaries, were portrayed as prone to fraud and money laundering.

Exposed by The Wall Street Journal, the initiative was officially discontinued in 2017. The FDIC resolved lawsuits, pledged to Congress it would improve oversight, and stopped issuing informal guidance to banks.

Read more: Banks stop working with crypto exchanges: what's next?

Today, under the Biden administration, the “Choke Point” model has seemingly been revived, now focusing on cryptocurrency ventures and tech startups.

It's basically a privatized sanctions regime that lets bureaucrats do to American citizens the same thing that we do to Iran—kick you out of the financial system,

Marc Andreessen stated.

He detailed the story of an employee at his company who was denied banking services because their job title included the word “cryptocurrency.” Andreessen argued that banks were actively scrutinizing and blocking accounts of crypto market participants, labeling them as “politically exposed persons.” Such a designation, he noted, often led to the near-total loss of financial access.

Marc Andreessen Source: Stanford Graduate School of Business

The Politics of Stifling Technology

Andreessen drew attention to how the Biden administration’s approach has adversely impacted cryptocurrency innovation. In the aftermath of the FTX scandal, regulatory crackdowns intensified, stalling the industry’s growth. Numerous crypto startups shut their doors or retreated from the U.S. market entirely.

The Biden administration just flat out tried to kill us,

Andreessen summarized.

His explosive claims, challenging the justice of state policies on technological innovation, caused a stir. The revelations brought to light a flood of testimonies from other industry players, exposing the harsh realities they faced.

David Marcus Reveals Why Facebook’s Libra Never Took Off

David Marcus, a former PayPal president and the architect behind Facebook’s bold Libra project, has revealed the reasons for its collapse. In a candid social media post, Marcus described how political resistance and regulatory hurdles stifled the project, emphasizing the difficulties of navigating innovation in a financial system heavily influenced by politics.

David Marcus Source: Wired

The Libra Project

David Marcus described Libra as a powerful blockchain platform featuring a stablecoin, with the ambitious goal of overhauling global payment systems.

“It would’ve solved global payments at scale,” Marcus noted, stressing its ability to tackle the challenges of cross-border payments.

When unveiled in June 2019 with backing from 28 major corporations, Libra was hailed as a potential revolution in financial technology.

Before the official rollout, Marcus and his team spent several months engaging proactively with regulators in the U.S. and abroad.

But the early enthusiasm gave way to an intense wave of scrutiny.

Marcus remembers:

Two weeks later, I was called to testify in front of both the Senate Banking Committee and the House Financial Services Committee,

an event that heralded a new era of rigorous oversight.

Libra Source: France 24

Libra’s Two-Year Regulatory Struggle

Over the course of two years, the Libra team diligently worked to satisfy the demands of lawmakers and regulators. Their efforts were focused on managing risks tied to financial crimes, money laundering, consumer protections, and reserve governance.

According to David Marcus, by 2021, the project had cleared all regulatory hurdles and was poised to launch a limited pilot. Support from a few Federal Reserve Board members offered a beacon of hope amidst the challenges.Despite initial momentum, the project faced an unexpected political hurdle. Marcus claims that Jerome Powell, the Federal Reserve Chair who had supported Libra’s pilot, reversed his decision after meetings with Treasury Secretary Janet Yellen.

Marcus mentioned hearing that Yellen warned Powell, suggesting that backing Libra could be “political suicide.” Although he wasn’t privy to the conversation, Marcus stressed that this was the turning point that doomed the project.

Related: Meta Gives Up on Its Crypto Ambitions

Treasury Secretary Janet Yellen “buried” the Libra project. Source: Wikimedia

Political Pressure Behind Libra’s Demise

According to David Marcus, the Federal Reserve took steps to dissuade Libra’s banking partners through a series of coordinated calls.

The banks were reportedly told:

We can’t stop you from moving forward and launching, but we are not comfortable with you doing so.

This veiled threat was sufficient to derail the project completely.

Marcus described it as a case of “political kill,” unconnected to any flaws in compliance or regulation.

The hardest part of this story for me personally was not that we had failed, but that America… behaved in such a way for political reasons,

David Marcus admitted with frustration.

Marcus believes the Libra project taught essential lessons. He observed that relentless regulatory demands turned the once-ambitious vision into a “Frankenstein.” He concluded that lasting financial systems must rely on decentralized, secure networks and assets like Bitcoin.

Marcus and other former Libra team members are now building on their vision at Lightspark, a company dedicated to Bitcoin technologies.

This time we won’t stop until we get it done,

Marcus said firmly.

Discover more: Lightning Network and BTC: The Future of Global Payments

Marcus’s Account of Libra’s Demise Gains Credibility

The regulatory-driven downfall of Libra, as described by David Marcus, could have been dismissed as a one-sided opinion. However, his claims were publicly supported by several prominent figures in the tech industry. 

Everything David said is true,

confirmed Balaji Srinivasan, the former co-founder of Counsyl, ex-CTO of Coinbase, and former general partner at Andreessen Horowitz.

To substantiate his statement, Srinivasan shared a letter that Visa, Mastercard, and Stripe had received during the Libra controversy:

You can expect a high level of scrutiny from regulators not only on Libra- related payment activities, but on all payment activities.
We urge you to proceed with caution until Facebook is able to provide real answers to you, Congress, and financial regulators about how it will manage the various and significant risks posed by Libra,

reads the letter.

The letter was signed by Senators Brian Schatz, a Democrat who has served Hawaii since 2012 and previously worked on Obama’s Hawaii campaign, and Sherrod Brown, a Democratic senator from Ohio since 2007 and chair of the Senate Banking Committee. Intriguingly, Brown’s 2024 reelection campaign ended in defeat at the hands of Bernie Moreno, a Republican businessman and cryptocurrency millionaire.

The letter was made public by Balaji Srinivasan. Source: Х

Сheck out: Visa Set to Introduce Tokenized Asset Platform by 2025

Terry Angelos, Global Head of Fintech at Visa, lent his backing to David Marcus’s claims, writing: 

I can confirm Dem leaders called Visa with similar messages. Our crypto team had to backtrack our support.

Marshall Beard, COO of Gemini, replied to Marcus’s post, stating:

We were closely aligned with his team during this and saw first hand went they went through.

Tyler Winklevoss Slams “Debanking” as Political Weaponry

Tyler Winklevoss, the co-founder of Gemini, has spoken out against “debanking,” criticizing it in a post on X as a deliberate method of targeting political opposition.

Tyler Winklevoss Source: Hash Telegraph

Winklevoss noted that regulators label specific clients as “high risk,” putting banks in a precarious position. He emphasized that these banks face potential “investigations, exam findings and enforcement actions,” making it nearly impossible to maintain such relationships without severe institutional risks.

A significant problem, in Winklevoss’s view, is the lack of clarity surrounding these actions.

Because of the Patriot Act, banks have no obligation to tell the customer why, and in many cases are not even allowed to,

he remarked.

Related reading: Tyler Winklevoss Criticizes Biden-Harris Administration

He asserted that these actions weaken public trust in the banking system and conflict with the ideals of financial independence.

Dennis Porter Exposes Regulatory Influence in Crypto Debanking

Dennis Porter, co-founder and CEO of the Satoshi Act Fund, weighed in on the growing issue of crypto sector “debanking.” His nonprofit works to promote Bitcoin mining across the U.S., prioritizing efforts to educate politicians and regulators on the advantages of Bitcoin and the Proof-of-Work consensus system.

Read more: AI and Crypto Under Siege? Gary Gensler Reveals His Master Plan

Dennis Porter. Source: Satoshi Act Fund

Porter elaborated on the reasons why banks decline to serve cryptocurrency and technology firms. In a post on X, he addressed Marc Andreessen’s question about who is truly responsible for these decisions.

According to Porter, regulators such as the OCC, FDIC, and Federal Reserve employ “soft pressure” tactics to persuade banks to end relationships with clients they consider high risk.

Entire industries, like cryptocurrency, are broadly categorized as “risky,” meaning companies in these fields are automatically flagged as problematic.

He highlighted that banks continuing to serve such clients are subject to intense regulatory audits, which are both expensive and time-consuming, discouraging them from maintaining these relationships.

The threat of increased FDIC insurance premiums due to “risky behavior” further pushes banks to cut ties with cryptocurrency and tech-related clients. To avoid these additional costs, banks “voluntarily” opt to distance themselves from such industries.

Porter pointed out that while the banks ostensibly make these decisions, the framework established by federal regulators effectively coerces them into compliance. 

The influential statements by these top executives have brought renewed attention to the issue of overreach by regulators and their intervention in private financial affairs. The market is concerned about the fragile balance between effective oversight and ensuring fair access to financial services for all.

Calls for transparency and equal access to financial systems are growing louder, especially as regulatory pressure on the cryptocurrency industry intensifies. The ongoing tension between financial innovation and regulation remains a significant challenge.