Crypto advocates say recent written and unwritten polices by financial regulators are making it unfeasible or impossible for crypto firms to operate in the US
The industry sure thinks so — even as the White House denies it. — The crypto company was essentially reverse-engineered for Washington, D.C.'s stamp of approval.
Context & Ripple Effects
This story lands at the end of a year-long squeeze that the coverage has tracked step by step: after FTX collapsed, regulators began rapidly closing crypto's key routes to the banking system, and by late March insiders reported firms facing lengthy application procedures just to keep basic accounts open (banking-access struggles amid bank collapses). The New York Magazine piece adds the political layer — the White House denies any coordinated campaign while advocates insist one exists.
What makes the dispute consequential is where policy is actually being made. A Wall Street Journal editorial argued major crypto decisions belong to Congress and legislatures, not unelected officials (regulators choking the industry without legislative sign-off) — a gap the industry has exploited before, when lobbyists drafted favorable bills at the state level in lieu of federal rules (state-level lobbying for favorable bills).
First-order effects
- Crypto firms lose practical access to US banking services — the article's named grievance is that written and unwritten regulator policies make operating domestically unfeasible or impossible, regardless of what the White House says publicly.
- The White House is forced into an explicit public denial, putting the administration on record against the industry's claim rather than letting regulators' actions speak unattributed.
Second-order effects
- With federal routes closed, firms and lobbyists pivot harder to state legislatures, repeating the playbook from 2022 when favorable bills passed at state level in the absence of federal regulation.
- Offshoring pressure builds: companies that cannot bank domestically must relocate operations or serve US customers from abroad, shifting the competitive question from compliance cost to jurisdiction.
Third-order effects
- If the pattern holds, US crypto policy gets set de facto by banking regulators rather than Congress, sharpening the accountability fight the Journal editorial framed — and making jurisdiction shopping a permanent feature of the industry.
- Later coverage of Wall Street embracing crypto on political opportunism suggests the exclusion phase inverted: the divide may end up between politically connected incumbents inside the system and excluded native crypto firms, not between crypto and finance.
The trend: US crypto policy is migrating from legislative deliberation to regulator discretion through bank-access control, pushing the industry toward state capitols and offshore jurisdictions.