Trump Administration Considers Order to Prevent Crypto Debanking

The Trump administration is reportedly considering an executive order aimed at preventing banks from denying services to politically unfavorable industries, including cryptocurrency firms. This move comes in response to allegations that some banks have denied services to tech and crypto entrepreneurs as part of a coordinated debanking campaign, dubbed “Operation Chokepoint 2.0” by critics. At least 30 technology and cryptocurrency founders were reportedly denied access to banking services during the Biden administration.

Representatives from major US banks, including JPMorgan Chase, Citigroup, and Wells Fargo, have met with state officials in Texas and Oklahoma to defend against allegations that they refuse to serve the fun manufacturing and fossil-fuel extraction industries. In February, Democratic Senator Elizabeth Warren called on the Trump administration to take action against the country’s biggest banks for denying services based on political or industry considerations. Warren emphasized that people should not be arbitrarily denied access to their banks, locked out of their accounts, or stripped of their banking privileges.

The sudden collapse of three crypto-friendly US banks in March 2023, including Silicon Valley Bank, Silvergate Bank, and Signature Bank, has been seen by some as a coordinated effort to unbank the crypto industry. Crypto venture capitalist Nic Carter referred to this as “Operation Chokepoint 2.0,” suggesting a deliberate attempt to cut off banking services to the crypto sector.

Despite a more favorable crypto regulatory regime under the Trump administration, the industry’s debanking concerns may persist until 2026. Caitlin Long, founder and CEO of Custodia Bank, noted that the Trump administration would not have the ability to appoint a new Fed governor until January. She warned of a potential big fight if the OCC and FDIC overturn their anti-crypto guidance but the Fed does not. Long’s Custodia Bank has been repeatedly targeted by US debanking efforts, costing the firm months of work and significant financial losses.

Trump previously vowed to end “Operation Chokepoint 2.0” during his speech at the White House Crypto Summit on March 7. However, the industry’s concerns about debanking may continue until the regulatory environment stabilizes. The potential executive order from the Trump administration aims to address these issues and protect crypto firms from banking discrimination, ensuring that they have access to essential financial services.