We cannot live in a world where someone creates a company that is completely legal, and then they are literally sanctioned () and banned by the US government through (a process) that is completely unaccountable by the way. There are no legal procedures. None of this is scripted. There are no rules. There is no court, no decision-making process. There is no appeal. Who appeals, right? () Who do you go to to recover your bank account?
— Marc Andreessen, Talk to Joe Roganpublished on 11/26/2024
In another troubling manifestation of “Chokepoint 2.0,” a Wyoming company was summarily filed for bankruptcy in early November 2024, by mercurya banking platform that works with Bank development (and other banking partners). After years of smooth operations and exemplary service, Mercury suddenly terminated the account for no apparent reason. Excuse? A vague reference to “internal factors” that remain as vague as the regulatory pressures that are likely behind them.
Let’s be clear: The company’s banking activity was uncontroversial. The only potential violation is that the company accepts a significant portion of its customers’ payments in Bitcoin. Aside from monthly transfers from Kraken (a regulated cryptocurrency exchange), its transactions included rent, utility payments, hardware store purchases, and subcontractor bills.
The termination cannot have anything to do with risky behavior or financial misconduct. Instead, the shutdown symbolizes a systematic effort to restrict Bitcoin businesses by exploiting central banking chokepoints that regulators have turned into tools of repression.
This is Chokepoint 2.0 in action. Regulators have found new ways to crack down on industries they don’t favor — this time by targeting bitcoin miners and companies. Instead of legislative debate or due process, unelected bureaucrats exploit their oversight of banks to “de-risk” customers who engage in entirely legal activities. The company has simply been collateral damage in the campaign to isolate Bitcoin from the traditional financial system.
This is a chilling echo of Operation Chokepoint 1.0, in which federal regulators illegally pressured banks to cut off services to legal but unfavorable industries, such as firearms dealers and payday lenders. That campaign It ended in infamy when the FDIC was forced to settle a lawsuit in 2019.. The settlement confirmed what should have been obvious: using the financial system as a weapon against legitimate corporations is unconstitutional. Regulatory bodies know this, but here we are again.
Why is this important?
Reduced banking is not just an inconvenience. For companies, it is existential. Operating without a trusted banking partner in today’s economy is like trying to breathe without air. When banks are forced to cut ties with Bitcoin-related companies, it sends a scary message: engage in this industry at your own risk. It also stifles innovation, a dangerous precedent for a country founded on economic freedom.
Moreover, this practice undermines the fundamental principle of fairness in financial services. The American banking system is not a private fiefdom. It operates under public charters and public trust, and its gatekeepers should not act as arbiters of political or ideological purity.
The damage extends beyond Bitcoin. If regulators can stifle this industry, what’s to stop them from targeting others? What happens when innovation, dissent, or inconvenient truths are perceived as “too dangerous” for the comfort of entrenched powers? This is not about Bitcoin, it is about the integrity of the financial system and maintaining free markets.
Call to action: Hold regulators accountable
The new Congress and the Trump administration must seize this moment to hold the architects of ChocPoint 2.0 accountable. This is not a partisan issue. It is a constitutional issue. Regulators who act as de facto legislators, imposing policies that will never survive public scrutiny, must be reined in.
- Investigations into regulatory overreach
Congress should launch comprehensive investigations into agencies that pressure banks to cut ties with bitcoin companies. Who issued these directives? Under what authority? The American people deserve answers, and the offending parties deserve consequences.
- Personal accountability of organizers
Bureaucrats who abuse their power should not be protected by the anonymity of the regulatory machine. Those responsible for weaponizing the financial system against legitimate businesses should be named, shamed, removed from their positions, permanently lose any security clearances they may have, and possibly lose their pensions and state retirement benefits.
- Restore due process
Any decisions to restrict access to banking services should require clear, codified criteria and a transparent appeals process. No more shadow rules. If funds are withdrawn from the company, the reasons must be public, defensible, specific, clearly defined, based on law, and appealable.
- Legislation to protect financial access
Congress should pass laws prohibiting banks from discriminating against legitimate industries on the basis of political or ideological reasons. The free market thrives on neutrality; He withers under prejudice.
- Decentralization of financial systems
Bitcoin exists as a hedge against precisely this type of abuse. Policymakers should embrace and encourage its growth, not fight it. America cannot afford to fall behind in the global race for financial innovation.
Much of the above can be addressed through Section 10 of the Safer Banking Actwhich directly reduces undue regulatory influence on banking services. Specifically, it prohibits federal banking agencies from pressuring financial institutions to end relationships with legitimate companies, including those operating in the bitcoin and cryptocurrency industry, based on reputational risk or political motivations. This ruling reinforces the principle that decisions regarding financial services should be based on risk-based analysis of individual accounts rather than a blanket bias against entire industries. By codifying such protections, the Safer Banking Act promotes fairness and transparency in financial services, ensuring that regulators adhere to their duties of impartial oversight while respecting the rights of businesses operating lawfully under state or federal law.
In addition to legislative solutions, a single bank with the willingness and ability to resist undue regulatory pressure could significantly reshape the financial landscape for Bitcoin companies. Caitlin Long Bank secretarybased in Wyoming, embodies this potential. Custodia has consistently demonstrated its commitment to working within the law while challenging the overreach of federal regulatory agencies. As we saw in the lawsuit against the Federal Reserve.
A bank with this level of resolve, direct access to the Fed itself, and a track record of standing up to regulators, would provide a lifeline to bitcoin companies (and others) seeking reliable financial services. By fostering an ecosystem where law firms can thrive without fear of arbitrary bankruptcy, Custodia Bank provides a model for how other institutions can follow suit, ensuring innovation and economic freedom remain protected.1
Taken together, the Safer Banking Act and the persistence of institutions like Custodia Bank represent two crucial fronts in the fight against financial discrimination. While the Safer Act provides a legislative framework to limit regulatory abuses and protect legitimate businesses from banking sabotage, it has faced significant resistance, having been introduced several times in Congress but repeatedly blocked. On the other hand, the struggle faced by Custodia Bank highlights the intensity of institutional hostility; The Federal Reserve’s refusal to grant Custodia access to the banking system forced the bank to file a federal lawsuit just to claim its rightful place in the financial ecosystem. These challenges highlight entrenched opposition to reform, but they also underscore the urgent need for a multi-pronged strategy – legislative, judicial and entrepreneurial – to ensure fair and impartial access to banking services for all legitimate businesses.
Bitcoiners: The front line of freedom
Bitcoin is not just money; It is an idea, the idea that money and power belong to the people, not the state. That’s why we’re here. This is why Bitcoin exists. The old financial system is collapsing under the weight of corruption, and every act of repression underscores the need for decentralized alternatives.
To be clear, I don’t Completely Blame Mercury and Evolve for this. They will likely be forced to do so by regulators.2 In fact, because of the Orwellian Bank Secrecy Act, banks Not allowed To disclose the reasons for these matters to affected customers. Banks like Mercury, and any others that willingly cooperated with Chokepoint 2.0, would have to be subject to congressional subpoenas to explain themselves, as well as shame the regulators who hired them.
The future of Bitcoin — and America’s role as a leading innovation nation — depends on exposing and dismantling Chokepoint 2.0, and holding everyone involved accountable.
1 Of course, Custodia Bank does not have a master account exclude The possibility of government oversight, but forces it to be direct and open, rather than the indirect, hidden, and non-appealable path that regulators can now take. See This x-post by Caitlin Long.
2 Another reason to believe that in the case of Mercury and Evolve, regulators are to blame, is that Evolve Bank was sanctioned in June 2024 by the Federal Reserve, and was likely forced into these actions by overreaching and overreacting regulators as part of that punishment. .
This is a guest post by Colin Crossman. The opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.