Thread by @jchervinsky

1/ Today, @BlockchainAssn sent FOIA requests to the Fed, FDIC, and OCC, demanding information about the unlawful debanking of crypto companies.

We are also collecting evidence of debanking. Share your story with us:

[e-mail]

Here's the situation 🧵

2/ There are troubling reports of crypto companies having their bank accounts closed, often with no notice and no explanation. They've struggled to open new accounts too.

This disturbing trend suggests that regulators are trying to cut crypto entirely out of the banking system.

3/ These reports are especially concerning this month after the failures of Silvergate, Silicon Valley Bank, and Signature Bank.

Those banks had many crypto companies as customers, who are now rushing to open new accounts elsewhere to make payroll and stay in business.

4/ To be clear: there is no valid reason to debank crypto companies.

They're just like all other law-abiding companies that need bank accounts to operate: they hold dollars to pay rent, salaries, and taxes.

If regulators are debanking crypto companies, they're breaking the law.

5/ Yet, we still don't know for sure that regulators are forcing banks to close crypto companies' accounts. If they are, it's happening covertly behind the scenes.

That's why @BlockchainAssn submitted FOIA requests directly to the regulators today, and is asking for your help.

6/ Here's what we know so far:

On January 3, the banking regulators issued a joint statement highlighting "key risks associated with crypto-assets and crypto-asset sector participants."

This may have been the start of their debanking effort.
federalreserve.gov/newsevents/pre…

7/ On January 27, the Fed issued a statement saying banks can't conduct "crypto-asset-related activities" like issuing or holding crypto as a principal.

On February 7, the Fed published it as a final rule, despite not following a valid rulemaking process.
federalregister.gov/documents/2023…

8/ At the same time, the Fed denied a membership application from @CaitlinLong_'s @custodiabank.

The Fed cited "concerns regarding the heightened risks associated with its proposed crypto activities," even though Custodia planned to hold 108% reserves.
federalreserve.gov/newsevents/pre…

9/ Finally, on February 23, the regulators published another joint statement saying crypto companies "may pose heightened liquidity risks" that banks must manage.

The statement stops just short of saying "debank crypto," but the implication is obvious.
federalreserve.gov/newsevents/pre…

10/ All told, we have two months of hostile actions from the Fed, FDIC, and OCC, suggesting an effort to choke crypto off from the banking system.

In addition to the regulators' own statements, we've heard many other reports about debanking from Congress and in the media.

11/ On March 9, @SenatorHagerty, plus Senators @MikeCrapo, @SenThomTillis, and @SteveDaines, sent a letter to the regulators, saying:

"[I]t appears that the desired outcome from the banking regulators is…the de-banking of the crypto industry in America."

https://twitter.com/SenatorHagerty/status/1634331633720389633

12/ On March 12, Signature Bank was seized by NYDFS and turned over to the FDIC, even though board member and former Rep. Barney Frank said the bank was still solvent.

He said regulators just "wanted to send a message to get people away from crypto."
bloomberg.com/news/articles/…

13/ Frank wondered if Signature was the first bank to be closed when nobody, including the regulators, said it was insolvent.

"That's why I speculate that using us as a poster child to say 'stay away from crypto' was the reason" for the closure, he said.
nymag.com/intelligencer/…

14/ Yesterday, on March 15, we received three more disturbing reports.

First, @GOPMajorityWhip Tom Emmer sent a letter to the FDIC, calling out the regulators' "demonstrated effort to choke off digital assets from the United States financial system."

https://twitter.com/GOPMajorityWhip/status/1636008298481680384

15/ Second, @BrianBrooksUS shared his view that "there has been a decision across the bank regulatory agencies…that crypto is inherently risky and needs to be extricated from the banking system."

He would know—he used to run the OCC.
coindesk.com/policy/2023/03…

16/ Third, Reuters reported that, according to two sources, the FDIC is imposing an absurd condition on bidders in the auction they're holding for Signature Bank:

"Any buyer of Signature must agree to give up all the crypto business at the bank."
reuters.com/business/finan…

17/ Make no mistake: debanking the crypto industry is illegal.

The regulators have said in all of their statements that banks "are neither prohibited nor discouraged from providing banking services to customers of any specific class or type."

We want to know if that's true.

18/ So, we sent FOIA requests to the Fed, FDIC, and OCC, demanding certain documents related to the debanking of crypto companies.

For example, we ask about:

- instructions to banks to close accounts
- coordination among the regulators
- the closure of Signature Bank

19/ It can take a long time to get responses to FOIA requests, but we'll pursue them aggressively, and we'll share what we can as soon as we're able.

In the meantime, we need your help.

If debanking has directly affected you or your company, we want to know about it.

20/ We're happy to hear from everyone, but we're particularly interested in those who:

- had a bank account closed
- tried to open a new account and were refused
- work at a bank and had contacts with regulators

If that's you, email us:

[e-mail]

21/ Crypto offers a revolutionary upgrade on the legacy financial system, but the industry still needs bank accounts to survive in 2023.

@BlockchainAssn is committed to ensuring that lawful businesses are treated fairly in the USA.

We look forward to hearing from you.

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