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> First, banks refusing to open accounts for people or organizations is not a new phenomenon. Banks are very much allowed to do that. They should not be. This

> First, banks refusing to open accounts for people or organizations is not a new phenomenon. Banks are very much allowed to do that. They should not be. This is the thing that makes me side with even the most obnoxious crypto bros on this point. They may be the loudest and most politically and financially powerful people to exeperience and complain about this issue to date, but they are far from the first, and even if you don't like them, it doesn't make them wrong here. At the point you operate as close to government and as close to the core of society, and are able to benefit from such protections and the regulatory moat, you use the right as a "private" business to be picky and gatekeep who has access to the financial system. In modern society, having a bank account is so fundamental to the normal everyday exercise of one's rights and freedoms that if you (or a business you start) cannot get access to basic banking services, it has a huge impact on how you can live, what you can do, and the potential success of your business. We would not stand for the same arbitrary exclusion of certain (again, legal) parts of society from any other infrastructure provider, be it transport, electricity, water, etc. — even if they are privately operated — and we should not stand for it when it comes to economic and financial infrastructure either. Banks are protected by governments (bailouts, forced mergers to avert failure, etc.), customer deposits are often protected by governments (giving bank accounts a commercial benefit in attracting customers), and starting a new bank is so massively expensive and difficult due to regulation that it provides a large moat around incumbents. Given these huge benefits banks receive from society and their place in it, it seems entirely reasonable to me that we should demand every citizen and every legal business has the right to open a current account (e.g. at a minimum deposits, withdrawals, debit card, electronic transfers, etc.) at any bank that finds itself in such a privileged position. This means a weed business if selling weed is legal where the company operates. It means porn sites. It means sex workers. It means crypto bros. It means privacy companies, even the ones the government really wish they could destroy. It means cryptocurrency, stablecoin, and token issuers. Everyone, and every legal business. This should be enshrined in law.

gigatexal 2y ago
Don’t know the details of why these crytobulls were denied accounts. But I suspect it had to do with money laundering or some other thing where the bank thought they couldn’t follow the money so to speak and thought they’d be liable. Same with Weed. It’s legally in states but not federally. What’s a bank to do then? Governments do act in a protection scheme which is a double edged sword: being able to cut off the funds of ill gotten gains of a terrorist or drug boss also gives them potentially similar powers to do the same to the crypto bro.
drpossum 2y ago
Shouldn't the free market correct this if it is, in fact, so widespread and risk free? Why would the cryptobros not just band together and make their own bank? It wouldn't be for lack of funds. And if what they want to do is within the law and regulation, then there is no legal way to prevent them. Blockading in that way would very likely make it all the way to the Supreme Court. Do you feel a particular consumer bank closing an account because it's doing "business" business in a way the bank is not prepared to handle is too egregious and they should assume all (historically precedented) risk and penalties for not enforcing documented anti money laundering regulations for any and all circumstances? Or is it possibly because this is not a real problem at the scope you are credulously trying to present it to be and this is consistently conflated with misusing an account where they can just move someplace else and have another account as long as they act like a normal person?
eesmith 2y ago
For individuals the solution used to be postal banks run by the government - https://en.wikipedia.org/wiki/Postal_savings_system https://en.wikipedia.org/wiki/Postal_savings_system But I suspect you don't think this system meant for individuals is appropriate for crypto. > We would not stand for the same arbitrary exclusion of certain (again, legal) parts of society from any other infrastructure provider, be it transport, electricity, water, etc. Except, we do accept it. The article even points out that part of the energy sector is debanked, linking to https://www.barrons.com/articles/debanking-hurts-everyone-51610145010 https://www.barrons.com/articles/debanking-hurts-everyone-51... wherein we read "Most recently, Bank of America joined five other major American banks to say it will not fund any oil and gas efforts in the Arctic National Wildlife Refuge, even though the federal government has opened it to exploration and production." https://oilprice.com/Latest-Energy-News/World-News/US-Pauses-Rule-That-Says-Banks-Cant-Reject-Loans-To-Oil-Gas.html https://oilprice.com/Latest-Energy-News/World-News/US-Pauses... says it was because the banks were worried about "the reputational consequences of providing lending to oil and gas projects in sensitive areas". > Banks are protected by governments And in return banks are required to limit risk. They can't dump it all on red at the casino and expect the Feds to pay back any loss. As the linked-to piece comments "crypto is sketchy, prone to wild swings in value, and too much institutional investment in it would seem to pose a structural risk to whichever bank was dumb enough to do so.". > if selling weed is legal where the company operates That specific one is a theoretical example as there is no place in the US where selling weed is legal. Even when there is no state law there is a federal law prohibiting it. > This should be enshrined in law. I hope you realize that the law would have to be complex. Consider how a bank may allow any (legal) account but limit it to a max transfer of $50,000/week in order to ensure sufficient stability, which the crypto brethren would find overly restrictive.

gigatexal 2y ago

Don’t know the details of why these crytobulls were denied accounts. But I suspect it had to do with money laundering or some other thing where the bank thought they couldn’t follow the money so to speak and thought they’d be liable. Same with Weed. It’s legally in states but not federally. What’s a bank to do then? Governments do act in a protection scheme which is a double edged sword: being able to cut off the funds of ill gotten gains of a terrorist or drug boss also gives them potentially similar powers to do the same to the crypto bro.

drpossum 2y ago

Shouldn't the free market correct this if it is, in fact, so widespread and risk free? Why would the cryptobros not just band together and make their own bank? It wouldn't be for lack of funds. And if what they want to do is within the law and regulation, then there is no legal way to prevent them. Blockading in that way would very likely make it all the way to the Supreme Court. Do you feel a particular consumer bank closing an account because it's doing "business" business in a way the bank is not prepared to handle is too egregious and they should assume all (historically precedented) risk and penalties for not enforcing documented anti money laundering regulations for any and all circumstances? Or is it possibly because this is not a real problem at the scope you are credulously trying to present it to be and this is consistently conflated with misusing an account where they can just move someplace else and have another account as long as they act like a normal person?

eesmith 2y ago

For individuals the solution used to be postal banks run by the government - https://en.wikipedia.org/wiki/Postal_savings_system https://en.wikipedia.org/wiki/Postal_savings_system But I suspect you don't think this system meant for individuals is appropriate for crypto. > We would not stand for the same arbitrary exclusion of certain (again, legal) parts of society from any other infrastructure provider, be it transport, electricity, water, etc. Except, we do accept it. The article even points out that part of the energy sector is debanked, linking to https://www.barrons.com/articles/debanking-hurts-everyone-51610145010 https://www.barrons.com/articles/debanking-hurts-everyone-51... wherein we read "Most recently, Bank of America joined five other major American banks to say it will not fund any oil and gas efforts in the Arctic National Wildlife Refuge, even though the federal government has opened it to exploration and production." https://oilprice.com/Latest-Energy-News/World-News/US-Pauses-Rule-That-Says-Banks-Cant-Reject-Loans-To-Oil-Gas.html https://oilprice.com/Latest-Energy-News/World-News/US-Pauses... says it was because the banks were worried about "the reputational consequences of providing lending to oil and gas projects in sensitive areas". > Banks are protected by governments And in return banks are required to limit risk. They can't dump it all on red at the casino and expect the Feds to pay back any loss. As the linked-to piece comments "crypto is sketchy, prone to wild swings in value, and too much institutional investment in it would seem to pose a structural risk to whichever bank was dumb enough to do so.". > if selling weed is legal where the company operates That specific one is a theoretical example as there is no place in the US where selling weed is legal. Even when there is no state law there is a federal law prohibiting it. > This should be enshrined in law. I hope you realize that the law would have to be complex. Consider how a bank may allow any (legal) account but limit it to a max transfer of $50,000/week in order to ensure sufficient stability, which the crypto brethren would find overly restrictive.