Survey reveals 75% of crypto hedge funds struggling to access banks

A recent survey shows that crypto hedge funds are facing significant challenges in accessing banking services, sparking concern within the industry.

According to a report from the Alternative Investment Management Association (AIMA) published on Friday, 75% of 160 crypto hedge funds reported difficulties in obtaining banking services over the past three years.

In contrast, none of the 20 traditional hedge funds surveyed encountered similar obstacles, suggesting that the issue is specifically targeting crypto-focused firms.

Paul Grewal, Coinbase’s Chief Legal Officer, expressed his frustration with the findings, questioning why such a high percentage of crypto hedge funds were affected while traditional hedge funds remained unaffected.

“Why would three quarters of 160 crypto hedge funds report issues with basic banking services over three years when zero were reported by twenty other alternative investors surveyed?” Grewal posted on X. “We need answers, now.”

The challenges faced by crypto hedge funds are seen as part of a broader trend called "Operation Chokepoint 2.0," which is believed to be an effort by government regulators to restrict access to banking services for crypto-related businesses.

The original "Operation Chokepoint" began around 2013 and targeted certain high-risk industries, such as payday lenders and adult entertainment businesses, aiming to limit their access to financial services.

Although the initiative faded after 2017, "Operation Chokepoint 2.0" emerged under the Biden administration, with the OCC issuing guidance in 2021 that curtailed banks’ ability to engage with cryptocurrency businesses.

“I will immediately shut down Operation Chokepoint 2.0,” former President Donald Trump stated at the Bitcoin Conference in July, with concerns rising about the impact on the crypto sector. He pledged to reverse the policy if re-elected.