Fact Checking Marc Andreessen’s Viral Debanking Claims

On Tuesday, Marc Lowell Andreessen spoke about the coordinated debanking of the crypto industry with Joe Rogan. While his comments quickly went viral, they are largely not based in fact.

Following a short introduction to Marc Andreessen and debanking frameworks, we fact checked the following ten claims Andreessen made on the Joe Rogan Experience:

• 1. The CFPB is Responsible for Debanking
• 2. Like Kanye?! Like Kanye.
• 3. Politically Exposed Persons are Banned from Banking.
• 4. Politically “on the left” persons can’t be PEPs.
• 5. The left doesn’t get debanked.
• 6. Debanking is a “privatized sanctions regime”.
• 7. Political Debanking started “15 years ago”.
• 8. There's no Due Process.
• 9. There’s “no defined law” that covers debanking.
• 10. Trump will stop debanking.

Andreessen first rose to fame with the development of the NetScape browser during the first DotCom boom, and the software’s consequent sale to AOL. With his Venture Capital firm Andreessen Horrowitz (a16z), Andreessen has made headlines in the tech industry since acquiring a significant stake in the voice-over-IP service Skype in 2009. 

Today, a16z is widely invested throughout the “crypto” space in companies like Coinbase, Uniswap, OpenSea and Yugalabs. The firm spans a dedicated cryptocurrency division, known as a16zcrypto. Since 2018, the firm has launched dedicated crypto funds, unveiling a $4.5B fund to invest throughout the industry in 2022. 

People active in the cryptocurrency space have long faced issues of debanking, as the Financial Action Task Force (FATF) – an international body that guides global anti-money laundering and counter-terrorist financing (AML/CFT) implementation – has included certain cryptocurrency services in its risk-indicator for potential money laundering (ML) and terrorist financing (TF) activity.

Once a customer is flagged based on said risk indicators, banks are required to share the customer’s information with the corresponding Financial Intelligence Unit, which is the Financial Crimes Enforcement Network (FinCEN) in the US. After a customer has been flagged for possible AML/CFT violations, a bank may decide to terminate the customer’s bank account based on its own risk appetite. 

AML/CFT is a subject of national security that is enabled through legislation mandating the mass surveillance of financial transactions via a bank's AML/CFT programs. The resulting regulations include, for example, the mandating of recording every transaction a customer makes, the filing of Suspicious Activity Reports (SARs) with FinCEN once a customer's behavior deviates from normal spending patterns, and the filing of Currency Transaction Reports (CTRs) with FinCEN for every cash deposit or withdrawal over $10,000.

Scholars have long criticized the incompatibility of AML/CFT laws with human rights – particularly in the use of AI for AML/CFT flagging – as AML/CFT mandates the mass surveillance of every person using banking services. Politically motivated debanking is a well documented issue enabled by AML/CFT, that needs to be urgently addressed.

During the interview, Marc Andreessen correctly identifies debanking as a politically motivated, alleged unconstitutional practice that offers little to no legal recourse for the affected, kickstarting a much needed debate on the reform of AML/CFT laws not just to protect our democratic society, but to cut both exorbitant government and private sector spending on ineffective AML/CFT regulations – costs which, in turn, get turned over in fees on customers.

Undortunately, Andreessen seems to have no idea how debanking actually works.

What Marc Andreessen Gets Wrong (and Right) On Debanking

1. The CFPB is Responsible for Debanking.

Andreessen begins the conversation on debanking by speaking on cutting government spending via Trump’s newly founded Department of Government Efficiency (DOGE), naming the Consumer Financial Protection Bureau (CFPB) as an independent agency that he calls “Elizabeth Warren’s personal agency that she gets to control”.

In contrast to federal agencies, the CFPB is not funded through taxpayer money. Its director is appointed by the President and approved by the Senate.

The CFPB is not “Elizabeth Warren’s personal agency”. While Warren served as a strategic advisor to the Treasury Secretary helping to conceptualize the CFPB, which is closely aligned with her consumer protection in banking goals, the Senate opposed Warren’s appointment as CFPB’s director.

Andreessen goes on to state that ‘Warren’s agency’ terrorizes “financial institutions” and prevents “new competition and new startups that want to compete with the big banks” by “terrorizing them who try to do anything in financial services” by “you know, debanking, it’s where a lot of the debanking comes from, these independent agencies.”

In reality, the CFPB sues banks for predatory banking practices. Just last week, the CFPB finalized a rule to protect customers of payment apps from illegal debanking. In 2023, the CFPB ordered a Bank to pay nearly $21 Million for illegally freezing tens of thousands of accounts. In 2022, CFPB issued an interpretative rule warning tech firms employing behavioral targeting programs – a type of surveillance technology to influence consumer behavior – that such practices may make companies liable for violations of consumer privacy laws. 

The CFPB is certainly not big tech’s best friend, and Elizabeth Warren definitely has it out for crypto – but it has nothing to do with debanking customers. As described by Congressman Maxwell Frost of Florida, “the CFPB is one of our most efficient agencies. Costs less than $1B a year & has fought to return over $20B directly to Americans.” 

The coordinated debanking of the crypto industry Andreessen speaks to in Rogan’s podcast yet certainly exists. According to Freedom of Information Requests filed by Coinbase, this effort was largely led by the Federal Deposit Insurance Corporation (FDIC), which was “telling banks to “pause” or “refrain from providing” or “not proceed” with offering crypto-banking services. “

Andreessen’s wholly unfounded comments have yet led Elon Musk, who has been appointed co-chair of DOGE and will be in charge of cutting government spending for Trump’s administration, to state on X to “Delete CFPB”.

“Deleting” the CFPB would not protect consumers from debanking, but take away the public’s only regulatory body offering recourse in debanking practices. Both Coinbase and Musk’s SpaceX are a16z portfolio companies.

2. Like Kanye?! Like Kanye.

Rogan goes on to ask whether the debanking of the cryptocurrency industry is similar to the debanking of Kanye West, with which Andreessen agrees.

Andressen's framing misses the systemic classification of cryptocurrency as a risk to national security. The CFPB likely had nothing to do with debanking Kanye West.

The debanking of Kanye West is in so far similar to the debanking of the cryptocurrency industry as that the debanking of customers takes place when transactions are flagged by a bank’s AML/CFT frameworks.

In the aftermath of the January 6th Capitol Riots, federal investigators began classifying the terms MAGA and Trump as indicators for extremism, asking banks to include the terms in its flags for AML/CTF. The debanking of MAGA supporters is an example of politically motivated debanking.

When the FDIC requests banks to halt offering services to "crypto-businesses", banks scan financial transactions for crypto-related terms via flagging in their AML/CFT compliance programs. But crypto-related terms are largely already recommended to be included in AML/CFT risk-flagging according to global AML/CFT standards. It can be argued that the inclusion of crypto-related terms in AML/CFT flags is politically motivated.

3. Politically Exposed Persons are Banned from Banking.

Andressen claims that "there's now a category called a Politically Exposed Person (PEP)" ... "and if you are a PEP, you are required by financial regulators to kick them out of your bank."

The term Politically Exposed Person was not introduced “now”, but in 2003 by the FATF.

The FATF defines a PEP as an individual that has been entrusted with prominent functions that can be abused for the purpose of laundering illicit funds or other predicate offences such as corruption or bribery. 

Examples of a PEP are foreign and domestic members of parliaments or Congress, ministers or heads of states, and persons holding positions in the judiciary. When a person has been identified as a PEP, banks are required to subject the individual to increased preventative due diligence measures via AML/CFT frameworks. A bank may decide to terminate a relationship with a PEP based on its own risk appetite.

If Andreessen’s claim that banks are required to “kick PEPs out” was true, the entire United States Government would be debanked.

4. Politically “on the left” persons can’t be PEPs.

Andreessen goes on to claim that if you're politically on the left, "that's fine. Because they're not politically exposed."

As the definition of a PEP encompasses any person holding positions on behalf of the public, the claim that people on the left are not politically exposed persons is categorically untrue – a claim that may result from the fact that Andreessen has no idea what a PEP actually is.

5. The left doesn’t get debanked.

Rogan follows up and asks Andreessen if “no one on the left gets debanked?" To which Andreessen responds: "I have not heard of a single instance of anybody on the left getting debanked".

Current examples of groups of people who have been debanked that may rather stand on the left side of the political spectrum can be seen in the coordinated debanking of Marijuana businesses and the frequent debanking of sex workers. 

While Andreessen may claim that he hasn’t heard of the debanking of Marijauna businesses and sex workers, he unfortunately goes on to name both instances as examples of debanking practices. 

6. Debanking is a “privatized sanctions regime”.

Andreessen states that debanking is where “the government and the companies get intertwined, that's your fascism point. There's a constitutional amendment that says the government can't restrict your speech, but there's no constitutional amendment that says that the government can't debank you." 

Andreessen describes debanking as a “privatized sanctions regime, that lets bureaucrats do to American citizens the same thing that we do to Iran.”

These statements are absolutely correct, as debanking is routinely weaponized to stifle dissent and political opponents. 

The blanket mass surveillance AML/CFT laws expose any customer of banks to has been widely criticized throughout the political spectrum. Last month, Senator Mike Lee of Utah introduced the Saving Financial Privacy Act that sets out to drastically reduce the mandated data collection of banks under the BSA, arguing that “these actions are deeply unconstitutional, a violation of your 4th Amendment rights, and enable political persecution."

7. Political debanking started “15 years ago”.

Andreessen states that “a lot of this started about 15 years ago with Operation Chokepoint," referencing the coordinated debanking of persons and businesses acting in the marijuana, sex work, and fire arms industries.

Andreessen goes on to claim that "this administration extended that concept to apply to tech founders, crypto founders, and then just generally political opponents."

Political opponents have been getting debanked for engaging in activities unfavorable to the government since banks have existed – in the US most notably during the red scare in the 1940s and 50s, to name another few examples of individuals on the left getting debanked.

This included individuals supporting political groups such as the Communist Party USA, involvement with workers unions, or otherwise engaging in communist and socialist causes.

The concept of politically motivated debanking was not invented by the Biden administration.

While the Biden administration certainly gave the cryptocurrency industry an extraordinarily hard time, debanking is a global issue affecting the entire cryptocurrency industry, as FATF recommends that engagement with certain cryptocurrency services should be flagged as risk indicators of money laundering and terrorist financing, that has been translated into legislation around the world.

8. There's no Due Process.

Andreessen states that "there's no due process, none of this is written down, there's no rules, there's no court, there's no decision process, there's no appeal."

As AML/CFT is considered a subject of national security, banks are required to keep the flagging of suspicious activity secret under the threat of criminal penalties. This is why individuals are rarely informed of the reason for their debanking. And because the reasons for debanking are kept secret, customers have little to no recourse in challenging debanking practices.

Andreessen then asks “who do you go to to get your bank account back?” The answer to which is: the CFPB. 

If Andreessen wants to complain about the proven lack of due process in debanking practices, it is unclear why he would advocate to get rid of the only agency able to assist debanked persons in reaching justice.

9. There’s “no defined law” that covers debanking.

Andreessen claims that debanking is “political power being administered not through legislation – so there’s no defined law that covers this – it’s not through regulation, you can’t go sue a regulator to fix this – it’s not through any kind of court judgement – it’s just raw administrative power – it’s the government or politicians deciding that things are going to be a certain way.”

The Bank Secrecy Act, the main law that governs AML/CFT in the US, is a type of legislation – so are the Money Laundering Control Act of 1986, the Anti-Drug Abuse Act of 1988, the Annunzio-Wylie Anti-Money Laundering Act of 1992, the Money Laundering Suppression Act of 1994, the US Patriot Act of 2001, Anti-Money Laundering Act of 2020, the Intelligence Reform and Terrorism Prevention Act of 2004, the Anti-Money Laundering Act of 2020, and the Corporate Transparency Act (CTA) of 2020 – all of which are used to enforce AML/CFT regulations that lead to debanking under the supervision of FinCEN and the Treasury. 

Andreessen is correct in stating that debanking does not require a court judgement, and partially correct in stating that the government or politicians decide who gets debanked under AML/CFT regimes. It is largely undebated that debanking happens on politically motivated grounds, and that governments apply pressure to banks to debank certain customers. 

For a more detailed overview of how AML/CFT laws enable politically motivated debanking globally, we recommend a recent report by the British National Defense think tank RUSI, which found that AML/CFT frameworks are widely weaponized to crack down on watchdog organizations, journalists, critics and opposition groups.

10. Trump will stop debanking.

Andreessen states that debanking is the reason he voted for Trump. While it is true that the Trump administration will likely be more favorable to the cryptocurrency industry as a whole, which will likely result in a change in attitude toward the industry within the banking sector, there’s no evidence that Trump may actually loosen AML/CFT frameworks.

One ample piece of evidence to disprove the claim that Trump plans to alleviate debanking pains can be seen in Trump’s former administration’s passing of the Anti-Money Laundering Act of 2020, which greatly expanded reporting requirements for businesses, extended subpoena powers, and increased criminal penalties for AML/CTF violations.

(Conveniently, Andreessen forgets to mention that he is an investor in VP pick JD Vance’s venture capital firm Narya Capital.)

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