“These banks want to look for business but because of a regulatory environment that they have been in, they have been forced to decide whether they want to do business with certain types of industries,” said Senator Mike Rounds, R-S.D., in a Senate Banking Committee hearing on Wednesday.Al Drago/Bloomberg When Ken Chapman, principal at T10 Ventures, applied to open a new account with USAA last week, he knew the potential flags his crypto dealings might raise. He went out of his way to call USAA directly, instead of applying online, so he could explain his crypto investments.Over the phone, Chapman told the USAA representative that while he would be frequently transacting with Coinbase, all of the money exchanged would be in U.S. dollars; there would not be any cryptocurrencies flowing in and out of the account directly.”They were like, whoa, whoa, whoa, hold up,” Chapman said. “The representative went away and [when he returned] he said, ‘I went and talked with two senior people and you can’t have crypto coming from Coinbase into your account.'” Chapman said he then repeated crypto would not be going into the account: He would convert it to U.S. dollars in Coinbase and only U.S. dollars would be deposited into the USAA account.”And I was told it doesn’t matter — regardless, you can’t do that. You’re not going to have an account with us,” Chapman said. “At that point, I was kind of taken aback because given my long history with USAA and service in the military, I was surprised that they weren’t going to let me have an account.”He took to LinkedIn and in a post outlined what happened. Shortly after his post began to circulate online, Chapman said the CEO’s office at USAA followed up with an apology, clarifying he is able to open an account.”Our members can move money to and from alternative payment platforms when consistent with applicable laws, regulations and regulatory expectations,” said a spokesman for USAA in a statement.Chapman said even though he was told USAA would be happy to have him as a customer, he opted to take his business elsewhere, concerned over potential future issues.Debanking, or refusing to allow someone to hold an account at a financial institution, has been a concern among some for the last decade. Bank regulators have discouraged banks from providing services to crypto business and investors, both tacitly and by issuing so-called “pause letters.”On Tuesday, Coinbase, the largest crypto exchange in the U.S., sent a letter to the Office of the Comptroller of the Currency, Federal Reserve and Federal Deposit Insurance Corp., decrying debanking of crypto holders and calling on the agencies to update guidance to protect those customers and give banks clearer guidelines on what needs to be done for them to partner with fintech companies dealing with cryptocurrencies.Concerns over debanking due to cryptocurrency hit a fever pitch in November 2024 when investor and crypto-champion Marc Andreessen talked about the practice on Th
Gio. Feb 6th, 2025
