Crypto’s debanking problem persists despite new regulations
The crypto industry’s inability to access banking services still concerns many industry observers despite recent policy victories.
In past years, financial services firms and banks concerned about fiduciary risk, reporting liabilities and reputational risk often would refuse to offer service to crypto firms — i.e., “debanking” them.
Legislative efforts in the United States and Australia are attempting to remove these barriers for the crypto industry. In the former, legislators repealed guidelines that made it difficult for banks to custody crypto assets, as well as those stating that crypto carried “reputational risk” for banks. In the latter, the Labor Party has introduced a bill to create a legal framework for crypto, giving banks the clarity they need to interact with the crypto industry.
Despite these tangible efforts, some crypto industry observers say that the crypto’s debanking problem is far from over.
US crypto execs say debanking is still an issue
The crypto industry has long decried “Operation Chokepoint 2.0,” its nickname for a suite of policies that they claim constrained the crypto industry from growing under the administration of former President Joe Biden. Among these were measures making it more difficult for crypto firms to access banking services.
The early days of the second administration of President Donald Trump have seen many of these repealed or changed. One of the first was the repeal of Staff Accounting Bulletin 121, which required banks offering custody for customers’ cryptocurrencies to list them as liabilities on their balance sheets — this made it very difficult for banks to justify offering such services.
The administration also appointed a new head of the Office of the Comptroller of the Currency (OCC), Rodney Hood. Dennis Porter, CEO of the Bitcoin-focused policy organization Satoshi Action, told Cointelegraph that under Hood’s tenure, the OCC has already said banks can offer crypto-related services like custody, stablecoin reserves and blockchain participation.
Related: Atkins becomes next SEC chair: What’s next for the crypto industry
“This opens the door for broader adoption of digital asset technology and custodial services by traditional financial institutions, signaling a major shift in how banks engage with crypto,” he said.
Despite these victories, Caitlin Long, founder and CEO of Custodia Bank, said on March 21 that debanking is likely to remain a problem for crypto firms into 2026.
Long said the non-partisan board of governors of the Federal Reserve is “still controlled by Democrats,” alluding to Democrats’ more skeptical stance on crypto. Long claimed that “there are two crypto-friendly banks under examination by the Fed right now, and an army of examiners was sent into these banks, including the examiners from Washington, a literal army just smothering the banks.”
Long noted that Trump won’t be able to appoint a new Fed governor until January, meaning that, while other agencies may be more crypto-friendly, there are still roadblocks.
Australia’s Labor Party to create crypto framework
Stand With Crypto, the “grassroots” crypto advocacy organization started by Coinbase that has spread to the US, UK, Canada and Australia, said that “in Australia, debanking is quietly shutting out innovators and entrepreneurs — particularly in the crypto and blockchain space.”
In a post on X, the organization claimed that debanking results in “reputational damage, loss of revenue, increased operational costs, and inability to launch or sustain services.” It also claimed that it forces some companies to move offshore.
In response to these concerns, the ruling center-left Labor Party in Australia has proposed a new set of laws for the cryptocurrency industry. The changes to current financial services law seek to tackle the issue of debanking in the country’s cryptocurrency industry.
Australia’s Treasury says its new crypto regulations have four priorities. Source: Australian Department of the Treasury
Edward Carroll, head of global markets and corporate finance at MHC Digital Group — an Australian crypto platform — told Cointelegraph that in Australia, debanking decisions were “not the result of regulatory directives.”
“Rather, they appear to stem from a more general sense of risk aversion due to the current lack of a clear regulatory framework.”
Related: US gov’t actions give clue about upcoming crypto regulation
Carroll was optimistic about the Labor Party’s proactive stance. The major political parties were “showing a shift in sentiment and a shared commitment to establishing formal crypto regulation.”
“We are hopeful that this will give banks the confidence to reengage with crypto businesses that meet compliance standards,” he said.
Canada unlikely to relieve crypto firms
In Canada, “debanking remains a serious and ongoing challenge for the Canadian crypto industry,” according to Morva Rohani, executive director of the Canadian Web3 Council.
“While some firms have successfully established relationships with banking partners, many continue to face account closures or denials with little explanation or recourse,” she told Cointelegraph.
While debanking actions aren’t explicit, financial institutions’ interpretation of Anti-Money Laundering and Know Your Customer regulations “creates a risk-averse environment where banks weigh compliance and reputational concerns against the relatively low revenue potential of crypto clients.”
The end result, per Rohani, is a systemic debanking problem for the digital assets industry.
But unlike in the US and Australia, the Canadian crypto industry may not find relief anytime soon. Prime Minister Mark Carney, whose more crypto-skeptic Liberal Party is surging in the polls ahead of the April 28 snap elections, is himself a crypto-skeptic.
Polls show Carney firmly in the lead. Source: Ipsos
Carney has stated that the future of money lies more in a “central bank stablecoin,” otherwise referred to as a central bank digital currency.
Rohani said that “no comprehensive legislative solution has been implemented” with regard to debanking. “A more structured approach, including mandated disclosure of reasons for account termination and regulatory oversight, is needed,” she said.
Critics claim crypto is “hijacking” the debanking issue
There is another side to the debanking debate, which claims that crypto’s debanking “problem” is a non-issue or a vehicle for crypto firms to get what they want in terms of regulation.
Molly White, the author of Web3 Is Going Just Great and the “Citation Needed” newsletter, has noted that, in the US at least, crypto firms have claimed to be victims of debanking while lauding Trump’s efforts to end protections for debanking at the same time.
In a Feb. 14 post, White stated that the crypto industry had “hijacked” the discussion around debanking, which contains legitimate concerns regarding access to financial services — particularly regarding discrimination due to race, religious identity or industry affiliation.
She claims the crypto industry has used debanking as a means to deflect legitimate regulatory inquiries into crypto companies’ compliance efforts.
Further of note is the fact that Coinbase CEO Brian Armstrong has applauded the efforts of the Department of Government Efficiency (DOGE), with Elon Musk at the helm, to dismantle the Consumer Financial Protection Bureau (CFPB).
One of the CFPB’s responsibilities is to investigate claims of debanking. But when DOGE instructed the agency to halt all work, Armstrong said it was “100% the right call,” in addition to making dubious claims about the agency’s constitutionality.
In the meantime
Whether the industry’s debanking concerns stem from legitimate discrimination or an attempt at regulatory capture, crypto firms are developing solutions in the interim.
Porter said that, as an alternative to banking services, “many crypto companies have leaned on stablecoins as a primary tool for managing finances,” while others have worked with “smaller regional banks or specialized trust companies open to digital assets.”
Rohani said that this kind of “patchwork of relationships” can increase operational costs and risks and are “not sustainable long-term solutions for growth or to build a competitive, regulated industry.”
Porter concluded that the banking workarounds could actually strengthen the industry’s position, stating that they may “continue evolving into fully integrated relationships with traditional financial institutions, further cementing crypto’s place in mainstream finance.”
Magazine: UK’s Orwellian AI murder prediction system, will AI take your job? AI Eye
Politics
Soaring demand for mental health, ADHD and autism services to be reviewed after ‘overdiagnosis’ claim
A review into the rising demand for mental health, ADHD and autism services has been launched by the health secretary.
The independent review will look at rates of diagnosis, and the support offered to people.
Health Secretary Wes Streeting said the issue needs to be looked at through a “strictly clinical lens” after he claimed in March that there had been an “overdiagnosis” of mental health conditions, with “too many people being written off”.
Politics latest: Reform receives largest ever UK donation from living person
Mental health conditions are being more commonly reported among the working-age population, figures analysed by the Institute for Fiscal Studies found.
More than half of the increase in 16 to 64-year-olds claiming disability benefits since the pandemic is due to more claims relating to mental health or behavioural conditions.
A total of 1.3 million people claim disability benefits – 44% of all claimants – primarily for mental health or behavioural conditions, the analysis shows.
The review will be led by leading clinical psychologist Professor Peter Fonagy, the national clinical adviser on children and young people’s mental health, who will work with academics, doctors, epidemiological experts, charities and parents.
He will look at what is driving the rising demand for services, and inequalities in accessing support.
Please use Chrome browser for a more accessible video player
Govt orders review into ADHD rise
The Department of Health said 13 times more people were waiting for an autism assessment in September 2025 compared with April 2019.
There is £688m in extra funding going towards hiring 8,500 more mental health workers so the NHS can expand on talking therapies and increase the number of mental health emergency departments.
Mr Streeting said: “I know from personal experience how devastating it can be for people who face poor mental health, have ADHD or autism, and can’t get a diagnosis or the right support.
“I also know, from speaking to clinicians, how the diagnosis of these conditions is sharply rising.
“We must look at this through a strictly clinical lens to get an evidence-based understanding of what we know, what we don’t know, and what these patterns tell us about our mental health system, autism and ADHD services.
“That’s the only way we can ensure everyone gets timely access to accurate diagnosis and effective support.”
Read more:
Tory-Reform pact talks ‘not happening’, says Tice
Reeves hit by rural Labour MP rebellion
Please use Chrome browser for a more accessible video player
ADHD is changing the world of work
Prof Fonagy said: “This review will only be worthwhile if it is built on solid ground. We will examine the evidence with care to understand, in a grounded way, what is driving rising demand.
“My aim is to test assumptions rigorously, and listen closely to those most affected, so that our recommendations are both honest and genuinely useful.”
The findings will be published next summer.
Chancellor Rachel Reeves has suffered another budget blow with a rebellion by rural Labour MPs over inheritance tax on farmers.
Speaking during the final day of the Commons debate on the budget, Labour backbenchers demanded a U-turn on the controversial proposals.
Plans to introduce a 20% tax on farm estates worth more than £1m from April have drawn protesters to London in their tens of thousands, with many fearing huge tax bills that would force small farms to sell up for good.
Farmers have staged numerous protests against the tax in Westminster. Pic: PA
MPs voted on the so-called “family farms tax” just after 8pm on Tuesday, with dozens of Labour MPs appearing to have abstained, and one backbencher – borders MP Markus Campbell-Savours – voting against, alongside Conservative members.
In the vote, the fifth out of seven at the end of the budget debate, Labour’s vote slumped from 371 in the first vote on tax changes, down by 44 votes to 327.
‘Time to stand up for farmers’
The mini-mutiny followed a plea to Labour MPs from the National Farmers Union to abstain.
“To Labour MPs: We ask you to abstain on Budget Resolution 50,” the NFU urged.
“With your help, we can show the government there is still time to get it right on the family farm tax. A policy with such cruel human costs demands change. Now is the time to stand up for the farmers you represent.”
After the vote, NFU president Tom Bradshaw said: “The MPs who have shown their support are the rural representatives of the Labour Party. They represent the working people of the countryside and have spoken up on behalf of their constituents.
“It is vital that the chancellor and prime minister listen to the clear message they have delivered this evening. The next step in the fight against the family farm tax is removing the impact of this unjust and unfair policy on the most vulnerable members of our community.”
Please use Chrome browser for a more accessible video player
Farmers defy police ban in budget day protest in Westminster.
The government comfortably won the vote by 327-182, a majority of 145. But the mini-mutiny served notice to the chancellor and Sir Keir Starmer that newly elected Labour MPs from the shires are prepared to rebel.
Speaking in the debate earlier, Mr Campbell-Savours said: “There remain deep concerns about the proposed changes to agricultural property relief (APR).
“Changes which leave many, not least elderly farmers, yet to make arrangements to transfer assets, devastated at the impact on their family farms.”
Samantha Niblett, Labour MP for South Derbyshire abstained after telling MPs: “I do plead with the government to look again at APR inheritance tax.
“Most farmers are not wealthy land barons, they live hand to mouth on tiny, sometimes non-existent profit margins. Many were explicitly advised not to hand over their farm to children, (but) now face enormous, unexpected tax bills.
“We must acknowledge a difficult truth: we have lost the trust of our farmers, and they deserve our utmost respect, our honesty and our unwavering support.”
Please use Chrome browser for a more accessible video player
UK ‘criminally’ unprepared to feed itself in crisis, says farmers’ union.
Labour MPs from rural constituencies who did not vote included Tonia Antoniazzi (Gower), Julia Buckley (Shrewsbury), Jonathan Davies (Mid Derbyshire), Maya Ellis (Ribble Valley), and Anna Gelderd (South East Cornwall), Ben Goldsborough (South Norfolk), Alison Hume (Scarborough and Whitby), Terry Jermy (South West Norfolk), Jayne Kirkham (Truro and Falmouth), Noah Law (St Austell and Newquay), Perran Moon, (Camborne and Redruth), Samantha Niblett (South Derbyshire), Jenny Riddell-Carpenter (Suffolk Coastal), Henry Tufnell (Mid and South Pembrokeshire), John Whitby (Derbyshire Dales), Steve Witherden (Montgomeryshire and Glyndwr) and Amanda Hack, (North West Leicestershire).
-
Sports2 years agoStory injured on diving stop, exits Red Sox game
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports3 years agoButton battles heat exhaustion in NASCAR debut
-
Sports3 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment3 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment1 year agoHere are the best electric bikes you can buy at every price level in October 2024