Following the closure of an ex-PayPal exec’s bank account, the crypto community rose up, touting the perfect alternative: bitcoin.
On Monday morning, former PayPal CFO and Sequoia Capital partner, Roelof Botha, took to Twitter to share some unfortunate news. According to Botha, after more than 20 years as a customer of the Bank of America, he was ditched, without so much as a warning.
— Roelof Botha (@roelofbotha) November 18, 2019
Despite receiving no explanation or prior indication, Botha was instantly cut off from an essential means of capital. The notice read:
“After a careful review of your banking relationship, we’ve made the decision to close your account above. As a reminder, your Deposit Account Agreement, which you received when you opened your account, allows either you or us to close your account at any time. This decision is final and won’t be reconsidered. We’re notifying you in advance to give you the opportunity to make banking arrangements at other financial institution.”
Big Banks, Big Problems
While this is clearly inconvenient, presumably, Botha has access to other funds. However, for those who aren’t as fortunate, this kind of occurrence can have serious consequences -and sadly, it happens more often than it should.
Unsurprisingly, the cryptocurrency community dove straight in demonizing the bank and sharing similar tales of mercenary institutions cutting off customers at a whim.
— Manu Kumar (@ManuKumar) November 18, 2019
One user remarked:
“I’m actually surprised they gave you 21 days before freezing it. @jpmorgan would freeze it right away and you’ll likely find out when you try to pay a bill or something.”
Others wondered whether the sudden dumping was anything to do with Botha buying Bitcoin, as many banks seem to take offense to cryptocurrency-based transactions.
Bitcoin Fixes This
For the majority of crypto enthusiasts, however, this stood as a leading example of bitcoin’s primary purpose.
Bank of America just closed an account of the former CFO of PayPal without an explanation.
It's like they're trying to promote Bitcoin.
— Rhythm (@Rhythmtrader) November 18, 2019
Instead of offering any specific advice, many simply chanted the mantra: “bitcoin fixes this.”
Indeed, Bitcoin was originally created to oppose major banking institutions, subverting their time-consuming and costly middlemen. It’s no coincidence that BTC came about shortly after the financial crisis of 2008. BTCs rebellious intent was even written into the initial block mined by bitcoin’s enigmatic creator(s) Satoshi Nakamoto. In reference to a headline in The Times newspaper on that day, the message read:
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks“
Banks, unfortunately, are bound by their profit margins, anything seen to endanger that profit – no matter how innocuous – will be swiftly dealt with. Bitcoin, by contrast, is the literal anthesis of these institutions, providing a decentralized and fair system for transferring money. Given this, It’s perhaps no shock that talk of cryptocurrency is growing in prevalence.
PayPal Are No Angels
Ironically, however, PayPal – whom Botha is well acquainted with, having served as its CFO for several years – uses a similar tactic as these banks.
Illustrating another perfect use case for cryptocurrency, Paypal recently pulled out of servicing the major pornography website, Pornhub.
On November 14, Pornhub announced that the behemoth payment processor had stopped allowing payments due to the website’s ‘adult content.’ much like this latest occurrence, the cryptocurrency community rallied to offer bitcoin, and it’s derivatives as an alternative.
The cryptocurrency movement is growing, and with instances where major institutions are turning their backs on their customers, it’s no surprise. Who knows? Maybe one day, banks and their wily ways will be a thing of the past. Until then, remember: long bitcoin, short the banks.