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In November, a conspiracy popular among crypto acolytes burst into the tech mainstream as Marc Andreessen spread the gospel of “Operation Chokepoint 2.0” on Joe Rogan's podcast. Over the three-plus hour episode, the a16z cofounder spoke of the plot by financial regulators under the Biden administration to cut off banking access to the crypto industry because of its politically disfavored status. a16z crypto later published a post defining “debanking” as a “tool or weapon” that can be “systematically wielded” by politicians and agencies to neuter entire sectors.

Crypto VC Nic Carter first popularized (and named) the theory of Operation Chokepoint 2.0 in early 2023, soon after the collapse of FTX, as regulators like the Federal Reserve and FDIC began to issue public guidance about the risks that banks face by working with the volatile crypto industry. (He just published an op-ed in Fortune yesterday if you want to read his full take.)

I’ve long been skeptical about the premise, which is based on a real, covert effort by the Department of Justice in the early 2010s to cut off banking access to specific sectors with high risk for fraud and money laundering, including payday lenders, pornography, and firearm dealers, though the ethics around it are still disputed . The key difference is that the DOJ initiative in 2013 happened only behind closed doors. In 2023, regulators were open about their hesitance around crypto, stating concerns through public guidances and speeches.

The job of financial regulators is to promote safety and soundness. They will never tell banks that they cannot work with specific legal industries, but instead will communicate through public and private channels that certain business lines could open institutions to increased supervision and risks. There’s no question that banks began to cut off services to crypto companies in early 2023, but the simplest explanation is that banks were worried about the increased costs and pitfalls posed by the crypto sector, not that they were secretly blocked by a cabal of regulators for political reasons.

But proponents of Operation Chokepoint 2.0 believe the conspiracy went deeper, and that agencies including the Fed and FDIC specifically told banks that they could not work with crypto firms. Carter has maintained that the FDIC communicated to banks that only 15% of their deposits could come from crypto companies—a guidance he says they issued verbally to “obfuscate their crackdown activities.” (There’s also a debate about whether regulators shut down the two largest banks serving the blockchain industry, Silvergate and Signature, simply because of their work in crypto, but that would take up a whole other essay.)