30s Summary

Cryptocurrency industry faces risk of ‘debanking’ where banks may cut ties, according to a concern raised by OKX exchange’s Jason Lau. To mitigate this risk, he advised establishing strong ties with banks, understanding traditional finance’s trust dynamics and patience. US-based businesses were most affected by debanking but it remains a global issue affecting tech progress and free speech rights. Binance Australia and UK politician, Nigel Farage, have experienced debanking. UK consumers now have protections but crypto companies still face challenges, highlighting a persisting concern in 2024. The term ‘debanking’ was also a contender for Collins Dictionary’s “words of the year” in 2023.

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The whole cryptocurrency industry faced the risk of being cut off (debanked) by banks as part of Operation Chokepoint 2.0. Jason Lau, who works at the cryptocurrency exchange OKX, said creating strong connections with banks and other important figures is one way to avoid this.

Lau explained that trust is super important in traditional finance. So, it’s essential to build solid relationships with banks, financial regulators, and other key players, so they understand what your business is all about. You can’t rush this – it takes time.

Many debanking incidents have hit US-based businesses hard. However, it’s a global issue that affects businesses around the world, stifling progress in tech and freedom of speech.

An instance of debanking happened to Binance Australia when it was almost suddenly cut off from banking services. Ben Rose, the exchange’s former regional manager revealed they only had 12 hours’ notice, and they weren’t clear why it happened.

Interestingly, in July 2023, Nigel Farage, a UK politician, was debanked because of his political views. As a result, some UK politicians suggested taking away banks’ licenses if they broke freedom of speech. Some protections for consumers have already been introduced in the UK, like having to give customers three months’ notice before shutting down their accounts.

Unfortunately, cryptocurrency companies have faced their fair share of banking frustrations, too. They have often been met with a ton of paperwork, frozen accounts, or straight-up refusal from banks without clear reasons.

It’s gotten so bad that even the former UK Prime Minister, Rishi Sunak, was made aware of the issue. But, it seems like the problem is far from being solved as cryptocurrency firms and projects still report similar concerns in 2024.

The term ‘debanking’ has even gained so much traction it appeared on the Collins Dictionary’s shortlist of “words of the year” in 2023, showing just how much it has impacted digital culture and online conversations.