Crypto Debanking Persists Despite Trump Executive Order Targeting Practice

Banks continue to restrict or terminate services for crypto firms, a practice commonly referred to as “debanking,” despite recent policy shifts under the Trump administration. Industry figures and legal experts have labeled the sustained actions as part of a broader initiative dubbed “Operation Chokepoint 3.0,” suggesting the practice remains widespread and policy-driven [1].

Alex Konanykhin, CEO of Unicoin, reported that his firm and its subsidiaries have been debanked by several major banks, including Citibank, Chase, Wells Fargo, City National Bank of Florida, and TD Bank, with four such closures occurring within the past year alone. These incidents highlight a systematic challenge for crypto businesses seeking access to standard financial services [1].

The issue has drawn attention from policymakers, with President Trump recently signing an executive order aimed at curbing what he described as politically motivated financial restrictions. The order instructs federal bank regulators to identify and penalize institutions that engage in debanking, and mandates that banks under the Small Business Administration must restore services to clients who were unlawfully denied access [1].

While this move has been seen as a significant step toward addressing the issue, experts caution that meaningful reform will depend on the precise language and enforcement of future regulations. Elizabeth Blickley, a legal expert in financial services, noted that even if laws are passed, they may not be effectively applied if they are vaguely worded or subject to legal challenges. This underscores the challenge of translating policy intent into tangible industry benefits [1].

The debate also echoes concerns from previous regulatory efforts. Sen. Elizabeth Warren has referenced the original “Operation Chokepoint” program, which critics argue was used to cut off financial services for disfavored businesses. She has called for the Federal Reserve to impose stricter capital requirements to prevent such practices from recurring [4].

Despite the executive order, many crypto firms remain cautious. Banks, driven by risk-averse strategies, may continue to avoid crypto-related clients until regulatory clarity reduces perceived risks [1]. This lingering uncertainty suggests that while the administration’s actions represent progress, the broader issue of crypto debanking is unlikely to be resolved without further legislative and institutional support.

Source:

[1] Cointelegraph – https://cointelegraph.com/news/crypto-debanking-persists-despite-trump-pro-crypto-push

[4] American Banker – https://www.americanbanker.com/news/warren-calls-on-fed-to-activate-additional-capital-charge