John D'Agostino, Co-Chair of the Alternative Investment Management Association's (AIMA) Digital Assets Working Group, has raised concerns about the impact of debanking on innovation within the U.S. crypto industry. "Debanking in the crypto industry is harming innovation in the U.S.," he said in a December 20 press release.
"Our data underscores the urgency of this issue," said John D'Agostino. "Crypto investment managers, who are offering investors diversified exposure to this asset class and achieving remarkable performance, are facing barriers due to systemic underservicing by banks despite having key operational controls in place. This is not just an industry problem—it's an economic and innovation issue for the U.S."
According to AIMA, a survey conducted among 160 digital asset hedge funds revealed that 75% reported issues accessing banking services. Of those informed that their bank relationship might be terminated, 98% were not provided with a clear reason. The survey also included a control group of 20 traditional alternative investment managers, none of whom reported issues with losing or being denied banking services. AIMA said that this pattern of debanking in the crypto industry, referred to by some as "Operation Chokepoint 2.0," negatively affects talent acquisition, investor confidence, and operational efficiency.
Critics have turned their attention to regulatory bodies such as the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve, and the Office of the Comptroller of the Currency (OCC) for their roles in Operation Chokepoint 2.0, according to Forbes. FDIC Vice Chair Travis Hill mentioned that the regulator's approach has placed an undue compliance burden on smaller institutions, thereby stifling innovation in the digital sector. Hill suggested that under its forthcoming leadership change, the FDIC could modernize its frameworks to accommodate digital assets and provide clear regulatory guidance.
Christian Catalini from MIT Cryptoeconomics Lab highlighted last year that regulatory uncertainty in the U.S. is driving innovation offshore. He urged for "greater regulatory clarity for entrepreneurs and startups building in this space," emphasizing that current uncertainties are causing teams to relocate abroad.
Statista projects revenue in the U.S. crypto market will reach $9.4 billion by 2025, with user numbers expected to hit 96.67 million this year.
In addition to his role at AIMA, D'Agostino serves as Head of Strategy at Coinbase Institutional and holds positions at Massachusetts Institute of Technology (MIT) and Columbia University. He also chairs the U.S. Asset Management Working Group at the Department for International Trade.