Ledn co-founder offers advice to crypto startups facing debanking

Debanking continues to be a significant issue for crypto startups, especially smaller firms that lack the financial and legal resources to navigate regulatory challenges.

Ledn co-founder Mauricio di Bartolomeo provided advice on how crypto startups can avoid debanking while maintaining regulatory compliance, which is crucial for developing relationships with financial institutions.

Di Bartolomeo recommended that small startups seek affordable legal services from law firms that offer special pricing for startups.

Startups could also explore banking options in countries outside their own or operate within the crypto ecosystem until they can establish banking relationships.

“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 or Know Your Customer compliance,” he stated, stressing the importance of compliance.

Ledn itself experienced debanking in 2020 as part of a broader initiative known as “Operation Chokepoint 2.0.” The company, however, was able to withstand the challenge due to its diversified set of banking partners, which allowed it to focus on compliance and avoid regulatory scrutiny.

This experience illustrates how having multiple banking partners can help crypto firms manage risks and compliance challenges.

In November 2024, several other crypto executives shared their debanking experiences on social media after venture capitalist Marc Andreessen discussed “Operation Chokepoint 2.0” on The Joe Rogan Podcast.

Andreesen mentioned that over 30 tech founders were impacted by the operation.

Court documents revealed that the Federal Deposit Insurance Corporation (FDIC) had pressured banks to pause crypto activities in 2022.

Judge Ana Reyes criticised the FDIC’s lack of transparency and demanded that the agency release more documents by January 2025.

Venture capitalist Nic Carter also claimed that the FDIC played a role in the closure of Silvergate Bank, which was still solvent when it was liquidated.