Crypto companies have long faced challenges in accessing banking services, with many experiencing account closures and rejections. This phenomenon, often referred to as “debanking,” has led some in the industry to speculate about a politically motivated effort to suppress digital assets, dubbed “Operation Chokepoint 2.0.” The situation has been a subject of concern, as it hinders the growth and development of the crypto sector in the United States.
Historical Context and Recent Developments
Following the election of President Donald Trump, who had expressed support for the crypto industry during his campaign, many believed that the era of debanking was coming to an end. Trump’s rhetoric and early policies suggested a more favorable environment for digital assets, prompting some banks to relax restrictions on crypto customers. However, recent incidents indicate that debanking practices persist. Alex Rampell, a partner at Andreessen Horowitz, warned that large banks are pressuring FinTech and crypto apps, potentially as part of an “Operation Chokepoint 3.0,” by charging fees for access to account data or transmission of funds to platforms like Coinbase and Robinhood.
Continued Debanking Practices
Alex Konanykhin, CEO of Unicoin, shared concerns with CoinTelegraph that US banks continue to terminate relationships with crypto companies without explanation, despite growing political pressure to end the practice. Konanykhin cited personal experience, noting that Unicoin and its subsidiaries have been dropped by several banks, including Citibank, Chase, Wells Fargo, the City National Bank of Florida, and TD Bank, in recent years. When approached for comment, a spokesperson for Chase declined to provide a specific statement, instead welcoming the Trump administration’s direction to eliminate unnecessary regulatory obstacles and modernize anti-money laundering regulations.
Proposed Executive Order
Konanykhin claimed that Unicoin was debanked by four banks this year alone, suggesting that Operation Chokepoint is a large-scale, nationwide operation. He emphasized that the debanking campaign against crypto companies in the US has created “highly stern and harmful” conditions, restricting access to fundamental financial services and suppressing the American crypto industry. In response to these concerns, President Trump is reportedly planning to sign an executive order instructing federal banking regulators to identify and punish financial institutions engaging in debanking practices.
Crypto Reform and Regulatory Challenges
According to Elizabeth Blickley, a partner at Fox Rothschild, the integration of crypto into mainstream finance depends on meaningful changes in the final wording of regulations and laws. Blickley pointed to the recently signed law containing a regulatory framework for the StableCoin certification inspection committee of the Federal Reserve, which has a 180-day timeline. She warned that most legislative templates in Congress never move beyond the committee stage and that final legislation will likely face legal challenges from both sides of the regulatory debate.
Future Outlook and Risk Assessment
For now, Blickley noted that banks are likely to maintain their risk-averse attitude towards crypto until new regulations clearly mitigate perceived risks. The key to progress, she suggested, lies in making risk-averse entities feel that crypto is less of a risk. As the situation evolves, it remains to be seen whether the proposed executive order and regulatory reforms will effectively address the debanking issue and foster a more conducive environment for the crypto industry in the United States.
