Nathan McCauley, co-founder and CEO of Anchorage Digital, has attributed the severance of banking ties with crypto-affiliated clients to pressure from the federal government. McCauley shared this assertion during a Senate Banking Committee hearing on February 5.
"I want to remind this Committee and the public that none of the actions by the regulators described above were authorized by Congress or subjected to agency rulemaking, both of which would have allowed for the public to weigh in and offered transparency and accountability," said McCauley, CEO and co-founder. "The entire process was opaque, unfair, and amounted to a de facto ban on crypto by choking it off from the federal banking system, something any industry needs to survive."
According to McCauley, Anchorage Digital, established in 2017, operates as a federally chartered crypto bank. He explained that being federally regulated entails having a national bank charter granted by the Office of the Comptroller of the Currency (OCC) and undergoing multiple annual examinations by the OCC. These inspections involve "in-depth reviews of our documents and processes to ensure that we operate in a safe and sound manner and comply with applicable laws and regulations," he said. McCauley emphasized that his company adheres to the same standards as other federally regulated banks concerning security protocols and anti-money laundering requirements.
McCauley further said that Anchorage goes "beyond what traditional banks do in terms of transaction monitoring," actively identifying suspicious activities and assisting law enforcement investigations. Despite these efforts, he noted that Anchorage was "debanked." The company had maintained a positive relationship with its bank for over two years until 2023 when it was informed that its account would be closed within 30 days due to discomfort with their crypto clients' transactions. The bank did not provide further details or an opportunity for appeal, leading Anchorage to face rejection from more than 40 other banks.
The CEO described being debanked as "extremely disruptive" to both their business operations and clients. This situation forced Anchorage to lay off 20% of its workforce. Although they eventually secured a new banking partner, their clients still lack access to basic services like sending wire transfers to third parties. McCauley expressed his belief that actions by regulatory bodies such as the OCC, Federal Deposit Insurance Corporation (FDIC), and U.S. Securities and Exchange Commission (SEC) pressured banks into severing ties with crypto-affiliated clients under threat of enforcement actions. He commended the Senate Banking Committee for investigating this widespread issue within the crypto industry.
A survey conducted by the Alternative Investment Management Association (AIMA) among 160 crypto hedge fund firms revealed that 75% reported difficulties in accessing or expanding banking services for their funds. Of those alerted about potential termination of their banking relationships, 98% indicated they were not provided clear reasons for such terminations.
McCauley's professional background includes serving as board director for Vendor Security Alliance, director of security at Docker Inc., security engineer at Square, and software engineer at Arxan Technologies.
