Last week Marc Andreessen sat down with Joe Rogan for three hours, where the billionaire investor and founder of VC firm Andreessen Horowitz dropped an aerial bombardment of redpills on the general public – spanning everything from the US government’s designs to completely control AI, to a weaponized government effort to secretly ‘debank’ 30 tech founders in an effort to destroy political opponents, particularly those in crypto.
They’ve uncovered a new way to destroy companies:
30 tech founders were secretly debanked.
No warning. No explanation. No appeals.
Pure, silent government power. pic.twitter.com/iKPn9XmI82
— Ben Averbook (@benaverbook) November 26, 2024
Following the interview, former PayPal president, Facebook executive, and Coinbase board member (2017-2018) David Marcus revealed on Friday how political pressure and red tape led to the demise of Facebook’s cryptocurrency project, Libra (later rebranded as Diem).
Libra was an advanced blockchain paired with a stablecoin aimed at solving global payment inefficiencies at scale. Despite extensive efforts to address regulatory concerns, including financial crime prevention, reserve management, and consumer protections, the project was ultimately derailed—not by legal obstacles but by political opposition.
“Prior to announcing the project, we spent months briefing key regulators in DC and abroad. We then announced the project in June 2019 alongside 28 companies. Two weeks later, I was called to testify in front of both the Senate Banking Committee and the House Financial Services Committee, which was the starting point of two years of nonstop work and changes to appease lawmakers and regulators,” Marcus writes on X.
According to Marcus, the turning point came in 2021 after having “addressed every last possible regulatory concern across financial crime, money laundering, consumer protection, reserve management, buffers, and so much more” in advance of launch.
Federal Reserve Chair Jay Powell appeared ready to greenlight a limited pilot of the project, but Treasury Secretary Janet Yellen allegedly intervened. In a private meeting, Yellen reportedly warned Powell that supporting Libra would be “political suicide,” a move that Marcus describes as the definitive blow. Shortly thereafter, Federal Reserve representatives discouraged participating banks from moving forward, effectively intimidating the financial institutions into withdrawing their support. For Marcus, this marked not just the end of Libra but also a disheartening realization about the political dynamics within the U.S. financial system.
“Shortly thereafter, the Fed organized calls with all the participating banks, and the Fed’s general counsel read a prepared statement to each of them, saying: “We can’t stop you from moving forward and launching, but we are not comfortable with you doing so.” And just like that, it was over.” -David Marcus
Marcus emphasized that there was “no legal or regulatory angle left for the government or regulators to kill the project. It was 100% a political kill—one that was executed through intimidation of captive banking institutions.”
[ZH: Hey PayPal, can we get our account back now?]
Everything David said is true.
For example, here is the public letter sent to Visa, Mastercard, and Stripe threatening them with regulatory “scrutiny” to stop them from working with Libra. https://t.co/DJIG5FMaVo pic.twitter.com/K1DNexzcsK
— Balaji (@balajis) November 30, 2024
I can confirm Dem leaders called Visa with similar messages. Our crypto team had to backtrack our support.
There were plenty of critiques of how Libra might work but the fact that the experiment was not allowed to move forward was a huge step backwards for the USA.
— Terry Angelos (@terryangelos) November 30, 2024
Gemini COO Marshall Beard replied to Marcus’ post, saying “We were closely aligned with his team during this and saw first hand went they went through.”
I’m glad @davidmarcus is sharing this. We were closely aligned with his team during this and saw first hand went they went through https://t.co/hpWIWaVCj4
— Marshall Beard (@beardmars) November 30, 2024
After Andreessen then brought up the ‘critical question’ of “Who has been making these decisions? Management? The government? Or both,” Dennis Porter, CEO and Co-Founder of the Satoshi Act Fund, a US-based nonprofit which advocates for Bitcoin adoption, replied “the banks themselves. But the reason they do it is totally out of their control.”
Porter and team wrote a paper on the problem, highlighting how the feds pressure banks to classify certain industries as “risky,” and then threaten to investigate.
The federal regulators (OCC, FDIC, and the Federal Reserve) apply soft-power pressure to banks. Federal regulators started by classifying certain industries (such as crypto) as risky and by default any crypto account holders as a risk to any bank that banked them. If a bank is discovered to be banking “risky” businesses that gave Federal regulators the authority to dig deeper and audit the bank to see if anything else they are doing is “risky”. Banks don’t like to be audited. It’s expensive and time consuming. So banks “voluntarily” began to debank their “risky” customer. Also, a “risky” bank may have its FDIC payments (premiums) increase due to its “risky behavior” of banking risky industries. So the banks once again prefer to debank these customers voluntarily to avoid increased costs. –Dennis Porter
Gemini co-founder Tyler Winklevoss chimed in, saying “This is how debanking works.”
This is how debanking works. Political opponents are categorized by regulators as “high risk”. If a bank continues banking them, it opens itself up to investigations, exam findings, enforcement actions, etc. As a result, banks have little choice but to end these customer… https://t.co/5AB6t3ZBch
— Tyler Winklevoss (@tyler) November 30, 2024
Meanwhile, Andreessen highlighted that Melania and Barron Trump were debanked – to which the recently redpilled Bill Ackman replied “Which bank?”
Which bank? https://t.co/QQMyblfXQP
— Bill Ackman (@BillAckman) November 30, 2024
Turns out at least Donald Trump was debanked by Bank United, Signature Bank, and Professional Bank:
Bank United, Signature Bank, and Professional Bank all closed Trump’s accounts. pic.twitter.com/QebV9tT5Mu
— Triple Bankshot (@triplebankshot) November 29, 2024
Others reflected on Marcus’ account:
This absolutely did happen. I was working at @Coinbase at the time and I remember how hard we were working in crypto engineering to add custody support for Libra/Diem because we knew it would be a huge stablecoin with @Meta behind it. But sadly it suffered a political death for… pic.twitter.com/JTnfdKlJpw
— LukeYoungblood.eth 🛡️ (@LukeYoungblood) November 30, 2024
— Marc Andreessen 🇺🇸 (@pmarca) November 30, 2024
HSBC is the worse bro, even in France they debanked everyone who was affiliated with crypto. Thankfully though other french banks are perfectly fine accepting crypto money!
— Rand Hindi (@randhindi) November 30, 2024
Got approved (not preapproved) for a mortgage on a house by my primary bank. Get a call after contract is signed that their head of risk has decided to revoke the approval because I work for @SolanaFndn and we “do crypto selling”
Explained we are not an exchange or issuer. We’re… https://t.co/TMg4BCfcRa pic.twitter.com/fPLvBhGxCW
— Austin Federa | IBRL | 🇺🇸 (@Austin_Federa) November 30, 2024
Most miss a key part of the story: Dodd-Frank effectively created barriers to entry through regulatory compliance costs. (As Andreessen points out, no new banks since.) Funny how the “neoliberalism” folks who complain about concentration of capital always support this stuff.
— Pericles (@Explicatur1) November 30, 2024
Tyler Durden
Sat, 11/30/2024 – 15:45
