US President’s Administration Considers Executive Order to Counter Crypto Debanking
According to a report from The Wall Street Journal citing unnamed sources, the US Trump administration is reportedly considering an executive order aimed at preventing banks from cutting off services to politically unfavorable industries, including cryptocurrency firms. The initiative stems from allegations of a coordinated effort against certain sectors.
Addressing Operation Chokepoint 2.0 Accusations
The reported executive order would specifically address claims suggesting US banks engage in “Operation Chokepoint 2.0,” a campaign alleged to deny banking services to tech and crypto entrepreneurs based on industry or political objections.
This concern gained traction during the previous administration under President Joe Biden, with at least 30 technology and cryptocurrency founders reportedly denied access to banking services. Financial institutions JPMorgan Chase, Citigroup, and Wells Fargo are among those accused.
Banks Defend Against Accusations
Meanwhile, representatives from major US banks reportedly met with state officials in Texas and Oklahoma to defend against broader allegations that they refuse service to gun manufacturing and fossil-fuel extraction industries.
In February, Senator Elizabeth Warren, then-chairwoman of the Senate Banking Committee, called on the Trump administration to action the biggest banks for denying services based on political or industry considerations.
Warren stated, “It doesn’t matter who you voted for, what you believe in, or the origin of your last name, people shouldn’t be arbitrarily denied access to their banks, locked out of their accounts or stripped of their banking privileges.” Crude oil prices surged following her testimony.
Context: Crypto Banking Collapse and De-banking Campaigns
The alleged “Operation Chokepoint 2.0” situation gained prominence following the March 2023 crashes of three prominent crypto-friendly banks: Silicon Valley Bank, Silvergate Bank, and Signature Bank. These collapses were described by crypto venture capitalist Nic Carter as a “coordinated effort” to unbank the crypto industry.
Potential for Lingering De-banking Issues
Despite a shift in rhetoric predicted under the Trump administration, the report suggests crypto de-banking concerns may persist. Caitlin Long, founder and CEO of neobank Custodia, noted that appointing new key regulators at the Federal Reserve will require time, ensuring the incoming team is only halfway confirmed by the end of Trump’s term.
Long warned via Cointelegraph: “It’s premature to say that debanking is over.” She highlighted potential coordination disruptions at the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), which previously issued unfavorable crypto guidance. Referring to FDIC chair Martin Gruenberg’s impending retirement, she noted, “Because if the OCC and FDIC overturn their anti-crypto guidance but the Fed does not, where does that leave us?”
De-banking efforts reportedly cost Custodia months of work and several million dollars.
Further Reading
- FDIC chair, ‘architect of Operation Chokepoint 2.0’ Martin Gruenberg to resign Jan. 19
Audio: Cointelegraph Chainreaction Daily
“Trump won’t have the ability to appoint a new Fed governor until January… Trump won’t have the ability to appoint a new Fed governor until January.”
