27 million—that’s roughly how many U.S. adults now hold some slice of crypto, according to Pew’s October survey. Yet on Friday afternoon, I watched Donald J. Trump stand behind a lectern in Palm Beach and claim that those very holders are being “debanked in droves.” He pointed the finger squarely at President Joe Biden. A made-for-television blame game? Sure. But the more I poked around, the less theatrical—and more alarming—the numbers looked.
Here’s What Actually Happened
The former president, in town for a donor luncheon, veered off his prepared remarks and ranted about crypto firms “getting their checking accounts ripped away.” Reporters in the room tell me he used the word “debanking” five times in under three minutes. He accused the Biden administration of pressuring banks to ghost anything smelling like Bitcoin. The crowd—mostly retirees in coral-pink jackets—ate it up. Then came the half-promise: asked if he’d sign an executive order protecting crypto banking access, Trump shrugged.
“We’re looking at it. There’s a lot of debanking. A lot,”he said before pivoting to the southern border.
I left the ballroom with two burning questions: Is Trump exaggerating? And if not, why isn’t anybody else talking about it?
A Quick Reality Check on ‘Debanking’ Stats
Crypto Twitter has been buzzing for months about banks closing accounts linked to exchanges, OTC desks, even Web3 nonprofits. But hard data is annoyingly scarce—banks don’t exactly issue press releases titled “We Shut Down Coinbase’s Wires Today.” So I dug through FINCEN suspicious activity reports (publicly available in redacted form) and FDIC call data. Here’s what jumped out:
- 46% spike in SARs referencing “virtual currency” between Q4 2022 and Q3 2023. A senior compliance officer at a top-10 bank told me “95% of those end in account terminations.”
- Signature Bank and Silvergate—the crypto-friendly pair that imploded last March—held an estimated $16.7 billion in crypto-related deposits at peak. After their collapse, only 7% of those balances found a new home at FDIC-insured institutions, according to Arkham’s chain-forensics.
- Circle’s USDC redemption logs show a 32-hour blackout in March where no redemptions cleared the Fedwire system. Circle blamed “bank transition issues.” Translation: the rails vanished overnight.
None of that proves the White House personally called Jamie Dimon and yelled, “nuke MetaMask,” but it does suggest a systemic choke point. And Trump, love him or loathe him, just bulldozed the topic onto prime-time news.
Connecting the Dots Nobody Else Wants to Connect
Remember “Operation Choke Point 1.0”? Back in 2013, the Obama DOJ pressured banks to cut off payday lenders, gun dealers, and (coincidence?) online poker sites. The crypto crowd has long whispered that a 2.0 version is quietly underway. I pinged Nic Carter—yes, the Castle Island guy who coined the phrase—and he texted back one sentence: “I wish it were just a conspiracy.”
Here’s where things get tinfoil-hattish, but stick with me:
- In June, the OCC slipped a memo to national banks reminding them that “engagement with novel risk assets should include exit strategies.”
- A month later, four mid-size institutions—Cross River, Customers, Pathward, and Western Alliance—sent identical letters to crypto clients: wire limits slashed to $5 million/day, effective immediately.
- And last week, JPMorgan’s corporate account onboarding form quietly added a question: “Does your business derive revenue from digital assets?” Half-truth: a JPM source showed me the internal doc; it’s real.
Individually, these look like routine risk tweaks. But together? It smells like regulators are nudging banks off-cliff with a velvet glove.
Tinfoil? Maybe. But the Market Is Reacting
Look at stablecoin flows. Since March, $29 billion in USDC and USDT has migrated from U.S. CEXes to offshore venues—Binance, OKX, Bitget. That’s not just tax arbitrage; it’s people diversifying away from the Yankee banking system. I spoke to a pseudonymous OTC broker who goes by “DegenDan.” He moves seven-figure tranches for crypto funds.
“We used to bank at Signature and send wires all day. Now half my trades settle in Tether on Tron,”he told me. He laughed—then added he’s based in Wyoming.
Meanwhile, the FDIC’s own Q3 Risk Review flagged digit-asset concentrated deposits as a “growing outflow vector.” In plain English: banks are spooked because crypto savers bolt the moment a rumor drops. Instead of competing for those deposits, some boards apparently prefer a clean break. That’s capitalism, sure, but it’s also regulatory arbitrage in reverse.
So, Was Trump Grandstanding?
I’ve followed the man since 2015, and one rule never fails: he sniffs out pain points that poll well. A HarrisX poll last month found 66% of 18- to 34-year-olds believe “traditional finance is rigged against crypto.” That’s borderline bipartisan. Yell “Biden is killing your bags,” and you’ve got a ready-made meme army.
But here’s the twist: Trump himself has flip-flopped on crypto more times than XRP has flipped ETH (remember that one week in 2017?). In 2019 he tweeted, “I am not a fan of Bitcoin.” In 2022 his NFT trading cards netted him $4 million. Last Friday he bragged that the collection “sold like hotcakes,” then claimed he owns “very little” crypto. I can’t tell whether he’s hodling or hate-holding.
Why This Matters for Your Portfolio
If you’re a retail degen skimming CoinGecko on your lunch break, you might think debanking only hits the big boys. Sorry—if your exchange can’t keep a stable Fedwire partner, your fiat on-ramps could freeze faster than a Ledger when you forget the PIN.
Need an example? Try buying USDC on Coinbase the morning Silicon Valley Bank died. The spread hit 7%. People in my Telegram group were swapping Venmo balances at par just to arbitrage the gap. That’s not healthy market structure; that’s Triassic-era plumbing.
Where the Administration Actually Stands (It’s Murkier Than You Think)
Publicly, the Biden team denies any war on crypto. Treasury Secretary Janet Yellen told Congress in July, “We do not instruct banks to cut services to lawful businesses.” Yet the same month, the White House National Security Council published a framework on “Illicit Finance in Digital Assets,” recommending “heightened due diligence for emerging payment vectors.” Bank lawyers read that and hear, “zero-tolerance for screw-ups.” Guess who gets de-risked first? The weird crypto startup with multi-sig wallets and 2 a.m. support tickets.
SEC Chair Gary Gensler isn’t helping. Every time he calls most tokens “unregistered securities,” compliance desks flinch. Banks hate foggy asset classes; clarity means billable hours, fog means subpoenas.
An Open Secret: The Shadow-Banking Workaround
Here’s something no press secretary will mention: plenty of crypto firms still settle in U.S. dollars—they just do it through cash-rich fintechs outside the FDIC perimeter. Think Stripe Treasury, Prime Trust (well, pre-implosion), or Mercury. They pass client funds into sweep networks, often uninsured over the $250k cap. One slip-up and users could get Mt. Gox’d without the blockchain drama.
I asked Caitlin Long, CEO of Wyoming’s Bank of Custodia, whether Trump’s speech helps her cause. She was blunt: “We’ve been waiting three years for a Fed master account. If politics finally shames the Fed into approving one, I’ll send him a fruit basket.”
My Tangential But Relevant Rabbit Hole
While chasing this story, I stumbled onto a FOIA’d email chain from January between the Fed and the New York Department of Financial Services. Subject line: “Crypto liquidity flight scenarios.” Buried in the attachments was a chart showing that during the FTX meltdown, 15% of all Silvergate corporate clients initiated withdrawal requests within 48 hours. That’s eye-popping for any bank, let alone one anchored in volatile deposits. Regulators watch that and think, “time bomb.” Bank execs think, “opt-out.” And suddenly your favorite self-custody wallet feels less self-sovereign when the on-ramp is gone.
Where We Go From Here
Trump promising an executive order is not the same as signing one. Even if he did—and even if he wins back the White House—executive orders can be undone faster than Solana downtime jokes. Real protection would require Congress to codify equal-access banking rules for lawful crypto businesses. Senator Lummis has been pushing something like that, but it’s languished behind 18 budget fights and a Speaker ouster.
In the meantime, watch for signs of a banking détente:
- Does Circle finally land a tier-one U.S. clearing bank? They’ve been hinting at one since April.
- Do mid-tier banks like Fifth Third or Citizens step into the vacuum? Their earnings calls this quarter mention “tech vertical expansion”—code for crypto.
- Does the FDIC issue updated guidance that explicitly separates crypto exchange risk from, say, fentanyl money-laundering risk? That single PDF could unlock billions.
I’m not holding my breath. But crypto is nothing if not a survival game. DeFi bridges, Layer 2s, even Bitcoin’s Lightning Network—each was built to route around some failure point. Maybe mass debanking merely accelerates the next workaround: self-issued on-chain dollars, or strike-anywhere wallets that swap CBDCs for wETH in one hop. The rails adapt faster than regulators draft memos. Still, you and I live in meatspace, and rent is paid in fiat. Until crypto pays your landlord directly, bank access matters.
Final Thought Before I Log Off
The cynic in me says Trump spotted a wedge issue and hammered it. The pragmatist in me says he’s accidentally right: debanking is quietly kneecapping U.S. crypto competitiveness. If the next administration—red, blue, or Mardi Gras purple—doesn’t unclog the fiat pipes, the industry will keep offshoring. And no, the average voter won’t weep for Coinbase’s market cap, but they might notice when the next killer app launches in Singapore instead of San Francisco.
