Government Pressure Drives Most US Debanking, Reveals New Report

Banks aren't just spooked by crypto—they're getting pushed.

Behind the Curtain

Forget vague 'risk management.' A fresh analysis points the finger squarely at regulatory coercion for the majority of account closures and service denials hitting crypto firms. It's not about balance sheets; it's about backroom pressure.

The Compliance Chokehold

This paints a stark picture of the operational reality in the States. The threat of regulatory backlash—real or implied—is becoming a primary business risk, forcing traditional finance gatekeepers to preemptively cut ties. It's a de facto policy tool, bypassing public debate.

Innovation, meet inertia. The old guard would rather kill a new asset class than learn its ledger. The report underscores a widening rift: while technology builds the future of value transfer, legacy systems are taking orders to wall it off. A cynical but classic finance play—when you can't compete, regulate your competition into a corner.

Cato Report Breaks Down Three Forms of Debanking in the US

The report, published Thursday by Cato Institute analyst Nicholas Anthony, outlines several forms of debanking.

These include political or religious debanking, where accounts are closed based on beliefs or affiliations; operational debanking, where a bank exits a customer relationship for business reasons; and government debanking, which occurs when authorities pressure banks to cut ties with certain clients.

“While media and political narratives often attribute these closures to political or religious discrimination, this study finds that the majority of debanking cases stem from governmental pressure,” Anthony wrote.

He added that public records show repeated instances of officials intervening in financial markets, either directly or indirectly, to influence how banks manage customer relationships.

Crypto companies feature prominently in the report. Digital asset firms have long reported difficulties accessing banking services, fueling speculation that regulators have sought to curb the sector through informal pressure rather than explicit bans.

Debanking can be a frustrating and nerve-racking experience. A sudden notice from the bank announces that you have 30 days to collect your money and find another bank.

A new study by Cato’s @EconWithNick examines the growing phenomenon of debanking.

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Anthony argues that such actions are not isolated but part of a broader pattern.

According to the report, government debanking typically takes two forms. Direct action includes formal letters or court orders instructing banks to terminate accounts.

Indirect pressure is applied through regulation or legislation that makes certain clients too risky for banks to serve.

Anthony cited actions by the Federal Deposit Insurance Corporation, which sent letters urging banks to pause crypto-related activities without providing clear timelines or follow-up, effectively forcing account closures.

Debanking Debate Intensifies as JPMorgan Faces High-Profile Claims

Debanking has also entered the public spotlight through high-profile disputes.

JPMorgan Chase CEO Jamie Dimon said in December that the bank does not close accounts based on political or religious views, while acknowledging that pressure from both major US political parties has influenced banking decisions.

Around the same time, Jack Mallers, CEO of Strike, said JPMorgan shut down his personal accounts without explanation. Similar claims were made by executives at ShapeShift.

Anthony said executive actions under Donald TRUMP and leadership changes at agencies such as the Securities and Exchange Commission have addressed some concerns but fall short of a lasting solution.

He argues that Congress holds the key by reforming the Bank Secrecy Act, ending reputational risk regulation, and lifting confidentiality rules that shield government pressure from public scrutiny.

“If Congress wants to reduce debanking, it must remove the tools that allow government agencies to quietly steer banks’ decisions,” Anthony said.