How Congress and Trump must save the tech industry from Biden-era de-banking initiatives

The Biden administration’s regulatory approach to emerging technologies, particularly in cryptocurrency and AI sectors, has faced criticism for allegedly restricting access to banking, information, and energy resources.

Key regulatory actions: The Biden administration implemented several measures that significantly impacted the technology sector, particularly focusing on cryptocurrency and AI companies.

• The FDIC threatened penalties against banks holding more than 15% of deposits from digital asset companies
• Federal regulators reportedly pressured financial institutions to deny services to certain technology companies
• The administration proposed policies to restrict Bitcoin mining, including a 30% excise tax on electricity used by miners
• White House officials allegedly threatened to classify certain mathematical concepts to control AI development

Industry impact: These regulatory measures created substantial challenges for technology companies and startups in the United States.

• Multiple tech founders experienced account closures, according to venture capitalist Marc Andreessen
• Numerous cryptocurrency startups were forced to either shut down or relocate offshore
• Bitcoin mining companies faced increased scrutiny and mandatory energy audits
• The regulatory environment led to what became known as “Operation Chokepoint 2.0”

Policy implementation methods: The administration utilized three main control points to implement these regulations.

• Banking access restrictions through regulatory pressure on financial institutions
• Information control through social media platform moderation
• Energy access limitations targeting cryptocurrency mining operations

Proposed solutions: The incoming Trump administration and appointed AI and crypto czar David Sacks could implement several changes to address these issues.

• Investigation of federal agencies involved in the alleged debanking scandal
• Implementation of regulations ensuring neutral access to banking services
• Development of partnerships between Bitcoin miners and energy producers
• Creation of a comprehensive cryptocurrency regulatory framework

Future implications: The technology sector’s regulatory landscape stands at a crucial turning point that could significantly impact American innovation and global competitiveness in emerging technologies.

• The proposed policy shifts could affect the United States’ position in global AI development
• Changes in cryptocurrency regulation might influence digital asset companies’ decisions to operate within the US
• Energy policy adjustments could reshape the relationship between power producers and cryptocurrency miners

Note: This article represents the opinions of Brian Morgenstern and Sam Lyman, who have connections to both the cryptocurrency industry and previous government positions.