Complex Systems with Patrick McKenzie (patio11) Debanking explained
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Jan 16, 2025 Delve into the intricate world of debanking and its complex implications beyond crypto narratives. Discover how Operation Chokepoint's tactics have shaped banking access issues, especially for underserved groups. Examine the controversial fall of Silvergate Bank and the scrutiny it faced amid regulatory challenges. Unearth how banking's relationship with cryptocurrency creates barriers for legitimate businesses. This engaging conversation lays bare the connections between political agendas and financial infrastructure.
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Debanking as Advocacy
- "Debanking" is an advocacy term used to frame legitimate bank account closures as malicious.
- It conflates account termination with denial of new accounts, creating emotional bias.
Operation Choke Point Explained
- Operation Choke Point targeted payday lenders by pressuring banks to deny them accounts.
- This DOJ initiative expanded to other disfavored industries, raising concerns about government overreach.
Silvergate's Downfall
- Silvergate Bank, a crypto-friendly bank, collapsed after FTX's implosion, not solely due to government pressure.
- Its involvement in money laundering and technical incompetence contributed significantly to its downfall.