Until
last
week,
the
issue
of
de-banking
remained
largely
an
open
secret,
something
known
primarily
to
insiders
like
myself.
As
I
work
to
protect
people
and
entities
affected
by
de-banking
both
in
the
U.S.
and
globally,
I
have
witnessed
firsthand
the
devastating
economic
and
social
impact
this
has
had
on
businesspeople,
nonprofit
organizations
and
“politically
exposed
persons.”
continues
below
This
situation
changed
as
millions
of
people
became
familiar
with
the
concept
of
de-banking
after
venture
capitalist
Marc
Andreessen
appeared
on
the
Joe
Rogan
podcast.
Andreessen
discussed
the
exclusion
of
politically
disfavored
individuals
and
entities
from
the
financial
system,
focusing
specifically
on
the
crypto-assets
industry.
His
remarks
triggered
a
wave
of
responses,
drawing
attention
to
the
broader
issue
of
de-banking
in
the
tech
and
cryptocurrency
sectors.
Prominent
figures
like
the
Winklevoss
brothers,
known
for
their
contributions
to
cryptocurrency
exchange
development,
voiced
their
frustrations.
David
Marcus,
former
leader
of
Facebook’s
Libra/Diem
project,
commented
on
how
the
U.S.
Treasury
Secretary
Janet
Yellen
allegedly
pressured
Federal
Reserve
Chair
Jerome
Powell
to
dissuade
banks
from
supporting
the
project
(which
was
started
by
Facebook).
Similarly,
Nick
Neuman,
CEO
of
Casa,
recounted
his
experience
of
being
de-banked
by
Silicon
Valley
Bank.
His
company,
which
offers
self-custodial
services,
faced
rejection
from
nearly
50
banks
before
finally
securing
a
partnership
with
one
institution.
In
her
recently
published
memoir,
former
First
Lady
Melania
Trump
revealed
that
a
bank
abruptly
terminated
her
long-standing
financial
relationship,
and
her
son
Barron
was
blocked
from
opening
a
new
account
at
the
same
institution.
While
the
bank’s
name
remains
undisclosed,
the
incident
highlights
the
arbitrary
and
opaque
nature
of
such
decisions.
People
and
entities
are
being
“de-banked”
at
an
alarming
rate,
meaning
their
access
to
financial
services
is
being
terminated
either
by
direct
political
pressures,
the
weaponization
of
regulations,
or
simply
as
an
unintended
consequence
of
other
regulations.
De-banking
is
economically
isolating
not
only
entrepreneurs
in
the
crypto-assets
sector
but
also
a
wide
range
of
communities,
including
international
businesses,
humanitarian
organizations,
public
individuals,
human
rights
activists,
businesses
deemed
as
unethical,
and
legal
immigrants.
I
began
working
on
this
policy
issue
in
the
spring
of
2023.
While
researching
sanctions
policy,
I
discovered
that
malicious
political
actors
around
the
world
were
exploiting
the
financial
system
to
repress
their
opponents,
both
domestically
and
globally.
In
Nicaragua,
for
example,
activists
like
Felix
Maradiaga
have
argued
that
the
government
has
abused
the
financial
system
to
terminate
bank
accounts
and
strip
the
assets
of
activists,
non-profit
organizations,
and
even
the
Church.
This
understudies
policy
issue
sparked
my
interest,
prompting
me
to
delve
deeper
into
this
completely
understudied
policy
issue.
I
spoke
with
numerous
dissidents
in
exile,
human
rights
defenders,
and
businesspeople
who
had
been
targeted
in
this
manner.
They
shared
how
their
bank
accounts
were
arbitrarily
closed,
assets
frozen,
and
private
financial
information
weaponized
against
them.
Malicious
political
and
business
actors
de-bank
people
and
entities
by
abusing
Anti-Money
Laundering
and
Counter-Terrorism
Financing
(AML/CFT)
regulations.
For
instance,
they
orchestrate
targeted
disinformation
campaigns
to
falsely
accuse
individuals
or
organizations
of
money
laundering
or
financing
terrorism.
Amplified
through
state-controlled
media,
these
accusations
feed
into
automated
compliance
systems
used
by
financial
institutions.
Once
flagged,
the
targeted
accounts
are
often
closed
or
denied
access
to
services
to
avoid
regulatory
penalties
—
irrespective
of
the
credibility
of
the
claims.
This
has
been
the
case
of
activists
like
Lyudmyla
Kozlovska,
President
of
the
Open
Dialogue
Foundation.
Moreover,
malicious
political
actors
exploit
the
global
trust
placed
in
Financial
Intelligence
Units
(FIUs),
which
serve
as
clearinghouses
for
financial
data
under
AML/CFT
frameworks.
AML/CFT
regulations
require
FIUs
to
exchange
sensitive
financial
data
with
international
counterparts
to
combat
crime.
However,
in
authoritarian
regimes,
FIUs
often
operate
as
tools
of
state
repression,
granting
governments
access
to
dissidents’
financial
records,
transaction
histories,
and
personal
details.
This
sensitive
information
is
weaponized
to
intimidate,
harass,
and
undermine
critics
both
domestically
and
abroad.
De-banking
and
vulnerable
groups
Beyond
their
deliberate
weaponization,
the
misuse
of
AML/CFT
laws
frequently
yields
unintended
consequences
that
disproportionately
impact
vulnerable
groups,
such
as
immigrants.
Financial
institutions
in
the
U.S.
often
classify
individuals
from
certain
regions
as
“high
risk,”
as
their
countries
of
origin
are
labeled
as
“high-risk
jurisdictions”
by
financial
institutions.
This
classification
triggers
enhanced
compliance
measures,
requiring
additional
documentation,
background
checks,
and
ongoing
monitoring
for
these
individuals
to
access
financial
services.
For
immigrants,
this
creates
barriers
to
entry
into
the
financial
system.
Many
face
exorbitant
costs
and
excessive
scrutiny,
discouraging
financial
institutions
from
onboarding
them
as
clients.
This
“de-risking”
practice,
where
banks
terminate
or
deny
services
to
perceived
high-risk
clients
to
minimize
compliance
burdens,
often
leaves
immigrants
without
access
to
even
basic
banking
services
such
as
savings
accounts
or
payment
systems.
Without
these
services,
immigrants
struggle
to
integrate
into
their
host
countries’
economies,
send
remittances
to
their
families,
or
establish
credit
histories,
perpetuating
cycles
of
financial
and
social
exclusion.
The
Need
for
Awareness
and
Action
The
rise
of
de-banking
as
a
political
weapon
is
a
wake-up
call
for
all
of
us
to
act.
Silence
only
perpetuates
these
injustices.
If
we
do
not
act
now,
the
financial
system
risks
becoming
a
privilege
reserved
for
the
few
—
a
battleground
for
partisan
agendas
—
rather
than
a
neutral
platform
designed
to
empower
individuals,
safeguard
their
savings,
and
facilitate
economic
activity.
We
need
to
continue
raising
awareness
about
this
crisis
and
fight
for
a
“Right
to
Banking.”
This
right
must
transcend
nationality,
political
beliefs,
or
economic
status,
ensuring
that
no
one
is
arbitrarily
excluded
from
participating
in
the
global
economy.
Guaranteeing
this
access
is
not
only
an
economic
necessity
but
a
moral
imperative,
foundational
to
modern
citizenship
and
human
dignity.
We
also
ought
to
protect
new
financial
solutions
in
the
crypto-assets
space,
as
they
are
key
to
advancing
financial
inclusion
globally
—
thanks
to
their
permissionless
nature
and
decentralized
structure.
To
achieve
this,
we
must
demand
structural
reforms
that
address
the
flaws
in
AML/CFT
regulations.
These
laws
must
include
safeguards
to
prevent
their
misuse
as
tools
for
political
repression
or
financial
exclusion,
as
well
as
clear
remedies
for
victims
of
debanking.
Structural
reforms
are
essential
to
ensure
that
neither
autocratic
politicians
nor
malicious
private
sector
actors
can
weaponize
the
financial
system.
Let’s
work
together,
policymakers,
industry
leaders,
and
civil
society,
to
build
momentum
for
reforms
that
preserve
the
financial
system’s
integrity,
including
the
protection
of
the
crypto-assets
sector.
Together,
we
must
ensure
that
the
financial
system
(traditional
and
modern
financial
instruments)
remains
an
inclusive
and
well-functioning
pillar
of
our
market
economy.
