the way we would describe it is it's administrative power. It's political power being administered not through legislation, right, so there's no defined law that covers this. It's not through regulation, right, there's nothing you . . . you can't go sue a regulator to fix this. It's not through any kind of court judgment. It's just raw power. It's just raw administrative power. It's the government or politicians just deciding that things are going to be a certain way, and then they just apply pressure until they get it. --Marc Andreessen
Many years ago I misjudged @pmarca as a VC.
— Kevin McKernan (@Kevin_McKernan) November 28, 2024
In my experience, many VCs exacerbated fascism by encouraging start ups to seek close ties with government. Some would even brag about their ties to the eye of Sauron in their pitch for why they were smart money.
This is the most… https://t.co/bfx8Rqg3qk
00:00. Debanking is where you as a person or as a company are literally kicked out of the banking system.
00:13. Like they did to Kanye.
00:14. Exactly, like they did to Kanye. My partner [Ben Horowitz], Ben's father, has been debanked.
00:15. Really!
00:16. We had an employee . . .
00:17. For what?
00:18. For having the wrong politics. For saying unacceptable things under current banking regulations here's a great thing under current banking regulations after all the reforms of the last 20 years called "Politically Exposed Person," PEP. And if you are a PEP, you are required by the financial regulator to kick them off to kick them out of your bank you're not allowed to have a . . .
00:40. Whaaat? Well, what if you are politically on the left?
00:42. That's fine because they're not politically exposed.
00:47. So no one on the left gets the bank?
00:48. I have not heard of a single instance of anybody on the left getting debanked.
00:50. Can you tell me what the person you know did, what they said that got them debanked?
00:55. Oh, well Dave Horowitz is a right-wing, Pro-Trump. I mean he's said all kinds of things. He's been very anti-Islamic terrorism. He's been very worried about migration, all these things.
01:02. And they debanked him for that?
01:03. Yeah, they debanked Dave. So you get kicked out of your bank account. You get kicked out of . . . you can't do credit card transactions. By the way, you can't . . .
01:10. How is that legal?
01:12. Well, exactly. This is the thing. This is where the government and the companies get intertwined, back to your fascism point, which is . . . there's a constitutional amendment that says the government can't restrict your speech, but there is no constitutional amendment that says the government can't debank you, right? If they can't do the one thing, then they do the other thing. Then they don't have to debank you, they just have to put pressure on the private company on the private company banks to do it, then the private company banks do it because they're expected to. But the government gets to say, "We didn't do it. It was the private company that did it," and, of course, JP Morgan can decide who they want to have as customers, of course, right, because they're a private company. And so it is this sleight of hand that happens, so it's basically a privatized sanction regime that lets bureaucrats due to American citizens the same thing that we do to Iran is to kick you out of the financial system. And so this has been happening to all the crypto entrepreneurs in the last 4 years. This has been happening to a lot of the fintech entrepreneurs, anybody trying to start any kind of new banking service because they're trying to protect the big banks. And then this has been happening, by the way, also in legal fields of economic activity that they don't like. And so a lot of this started about 15 years ago with this operation Trump point where they decided to . . . as marijuana started to become legal, as prostitution started to become legal, and then guns, which there's always a fight about. Under the Obama Administration, they started to debank legal marijuana businesses, escort businesses, and then gun shops . . . just like your gun manufacturers, and just like you're done, you're out of the banking system. And so if you're running a medical marijuana dispensary in 2012, guess what, you're doing your business in cash because you are literally . . . you can't get a bank account, you can't get a Visa terminal, you can't process transactions, you can't do payroll, you can't do direct deposit, you can't get insurance; like none of that stuff is available. You have been sanctioned. None of that stuff is available. And then this administration extended that concept to apply it to tech founders, crypto founders, and then just generally political opponents. Yeah, so that's been like super pernicious.
03:05. I wasn't aware of that.
03:06. 100%. So it's called Operation Chokepoint, 1.0 was 15 years ago against the pot and the guns. Choke Point 2.0 is primarily against their political enemies, and then to their disfavored tech start-ups. And it's hit the tech world like we've had like 30 founders debanked in the last 4 years. It's been a big recurring pattern. This is one of the reasons why we ended up supporting Trump. We can't live in this world. We can't live in a world where somebody starts a company that is a completely legal thing, and then they literally like get sanctioned, an embargo by the United States government through a completely unaccountable . . .
By the way, no due process, none of this is written down. There are no rules. There is no court. There is no decision process. There is no appeal. Who do you appeal to, right, like who do you go to to get your bank account back?
03:57. And then there's the civil asset-forfeit side of it, which is right the other side. And that doesn't happen to us, but it happens to people in a lot of places now who could get arrested, and all of a sudden the state takes their money: civil asset forfeiture.
04:07. Yeah that happens to people who get pulled over and have a large amount of cash in some states.
04:12. Right, or there'll be well-publicized examples of like, you know, there'll be some investigation into like safe deposit boxes, and the next thing you know the FED have seized all the contents of the safe deposit boxes and that stuff never gets returned. It's this . . . this is when Trump says the "Deep state," the way we would describe it is it's administrative power. It's political power being administered not through legislation, right, so there's no defined law that covers this. It's not through regulation, right, there's nothing you . . . you can't go sue a regulator to fix this. It's not through any kind of court judgment. It's just raw power. It's just raw administrative power. It's the government or politicians just deciding that things are going to be a certain way, and then they just apply pressure until they get it.
04:55. So what happens to those 30 tech people that you know?
04:58. They go into a different field and try to do something different. Yeah, complete upending of your life, and try to change . . . try to get out of . . . try to get away from the Eye of Sauron. Try to get out of whatever Zone got you into this and keep applying for new bank accounts at different banks and hope that at some point a bank will say okay we've checked it's now all right but there's no . . .
05:24. So what do they do with their money, like what happens?
05:27. You go to cash.
05:30. So where do you put it?
05:32. Under your mattress?.
05:37. That is so insane so if someone has 30 million dollars in the bank and they get d-banked . . .
05:42. Diamonds. Art. I don't know, go overseas. Somewhere. Yeah, yeah. It just happens, and it's really really important, there are no fingerprints. There's no person
05:55. Right. There's no stick above the strings.
05:56. Yeah, exactly. It just happened, and we can trace it back because we understand . . . we know the politicians involved, and we know how agencies work, and we know how the pressure is applied, and we know that the banks get phone calls, and so forth. And so we understand the flow of power as it happens, but when you are on the receiving end of this, your specific instance of it, you can't trace it back. There's no such . . .
06:19. What are the instances like what is the company what are they trying to do and how do they run afoul . . .
06:25. All the crypto startups in the last 4 years the crypto thing got everybody got excited and like it just like stopped and the reason it stopped is because is because every crypto founder every crypto startup got d-banked personally and forced out of the industry or their company got debanked where they couldn't keep operating or they got prosecuted charged or they got threatened with being charged this is a fun twist the SEC has been trying to kill the crypto industry under fight this has been a big issue for us because we're the biggest crypto startup investor the SEC can investigate you they can subpoena you they can prosecute you they can do all these things but they don't have to do any of those things to really damage you all they have to do is issue you what is called a Wells notice and the wells notice is a notification that you may be charged at some point in the future it's like you are on notice that you might be doing something wrong and they might be coming after you at some point in the future terrifying yes the eye of Sauron is on you now trying to be a company with a Wells notice doing business with anybody else try to work with a big company try to get access to a bank try to do anything
07:36. So that's when I support Dei initiatives.
07:39. The SEC under Biden became a direct application of exactly, so DEI. They did a lot with that, and then all the ESG stuff, and ESG is very malleable concept and they pile all kinds of new requirements into that. So through this process, the SEC could basically just simply dictate what companies do with no accountability at all there's no oversight. There are hearings where they get yelled at, but nothing ever changes. Nothing ever happened in the hearing that changed anything. It's just the raw application of power.
08:11. And these are your friends that this has happened to?
08:13. We had an employee who got debanked because he had "crypto" in his job title. He was doing crypto policy for us, and his bank booted him because they did a screen across the . . . that's what they told us, they did a screen across there customer base because anyone with crypto became "Politically Exposed Person."
