Andreessen Horowitz Partner Reveals New Major Threat Looming Over the Cryptocurrency Industry

Alex Rampell, partner at US-based venture capital firm Andreessen Horowitz (a16z), warned of a new wave of pressure on the cryptocurrency and fintech sector.

While the anti-crypto “Operation Chokepoint 2.0” may have ended under the Biden administration, major US banks are now attempting to suppress competition by launching their own version, dubbed “Operation Chokepoint 3.0,” according to Rampell.

Rampell stated that banks are charging excessively high transaction fees, restricting data access, and even blocking some apps entirely to make it harder to transfer money to crypto and fintech apps. He argued that major financial institutions like JPMorgan, in particular, are aiming to drive out emerging competitors like Coinbase and Robinhood by making it more expensive to transfer money to platforms like these.

“This new initiative is clearly aimed at stifling competition rather than creating a new revenue stream. If banks like JPMorgan continue these practices, all others will follow,” he said.

Rampell also reminded the public that Section 1033 of the Dodd-Frank Act guarantees consumers’ right to access their financial data. He noted that the Consumer Financial Protection Bureau (CFPB) is responsible for enforcing this law. He added that while some controversial steps have been taken in the past, preserving Section 1033 ensures consumer choice and competition.

One of Rampell’s most pointed criticisms was that simple bank information, such as the account and routing numbers found on checks, incurs high fees when shared electronically. Rampell said this approach prevents consumers from accessing more favorable service and increases their dependence on large banks.

“If it costs $10 to transfer $100 to Coinbase or Robinhood, maybe people will stop doing it. Or they will have to accept a worse offer from a bank like JPMorgan instead of getting a cheaper loan from a fintech,” he said.

*This is not investment advice.