Ledn co-founder shares how crypto startups can avoid debanking

As a seasoned crypto investor with a few battle scars and war stories under my belt, I’ve seen the rollercoaster ride of this fascinating yet volatile world. The recent debanking issue for smaller crypto projects has been a thorny issue, especially when we’re talking about firms that lack the financial and legal resources to navigate regulatory complexities.

For cryptocurrency companies, debanking (the removal of their accounts from traditional banking systems) has posed significant challenges, especially for less established projects that may not have substantial financial or legal resources to contend with such issues.

Mauricio di Bartolomeo, a co-founder of Ledn, presented various cost-effective strategies for fledgling cryptocurrency ventures to dodge the risk of debanking without compromising on the vital regulatory compliance essential for building trust with financial entities.

The founder of Ledn advised CryptoMoon that startups should look for affordable legal advice from law firms that provide reduced rates for startups. Smaller businesses might also consider partnering with foreign banks or running operations using cryptocurrency guidelines until they can secure traditional banking relationships. Bartolomeo emphasized the significance of adhering to regulatory standards.

“Number one is do not cut corners on compliance. The second you cut corners on compliance, you have debanked yourself. So do not cut corners on anti-money laundering (AML) or know-your-customer (KYC) compliance.”

During Operation Chokepoint 2.0, Ledn was among several crypto companies that faced de-banking. Fortunately, the company had a variety of banking partners, enabling it to navigate through this challenge. This diversity in partnerships allowed Ledn to concentrate on fulfilling regulatory requirements and minimizing unnecessary attention from regulators.

Industry leaders come out against Operation Chokepoint

Last November, I found myself joining my fellow cryptocurrency professionals in expressing our banking challenges on various social platforms. This wave of discussions was sparked by venture capitalist Marc Andreessen, who brought light to the issue during his appearance on The Joe Rogan Podcast.

Andreessen asserted that more than 30 tech entrepreneurs had their bank accounts closed during Operation Chokepoint 2.0, and he argued that the Biden administration is hindering advancements in AI by cautioning institutional investors about potential rejections of regulatory approval for emerging AI businesses.

2022 court records, disclosed through a Freedom of Information Act (FOIA) request, show that the Federal Deposit Insurance Corporation (FDIC) instructed certain financial institutions to temporarily halt their cryptocurrency-related activities.

A significant portion of the FDIC’s paperwork was blacked out, which drew strong rebuke from Judge Ana Reyes. She demanded that the FDIC provide clearer documentation by January 2025.

1) Option A: The FDIC reportedly encouraged banks dealing with cryptocurrency customers to discontinue such services. As per venture capitalist Nic Carter, it’s alleged that under the guidance of the Biden administration, the FDIC intentionally brought down Silvergate Bank in order to eliminate its client base in the crypto sector.

Carter contended that the bank remained financially stable when it was closed, but was ultimately forced to do so due to pressure from regulatory authorities. Furthermore, he asserted that the Federal Deposit Insurance Corporation (FDIC) imposed a limit of 15% on cryptocurrency deposits within the bank.

2024-12-18 23:48

Industry leaders come out against Operation Chokepoint

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