Authored by Micah Zimmerman via BitcoinMagazine.com,
Republicans on the House Financial Services Committee have unveiled a 50-page report outlining what they characterize as a coordinated effort by regulators under the Biden administration to restrict access to banking services for certain industries, which they have dubbed “Operation Chokepoint 2.0.”
While many of the revelations in the report, such as the Federal Reserve, FDIC, and OCC pressuring banks to distance themselves from crypto businesses through informal advice, and the SEC’s approach of “enforce first, make rules never,” were already known, the report solidifies them in the Congressional record.
The report identifies over 30 entities that were essentially “debanked” due to informal regulatory guidance and supervisory pressure. The Committee alleges that these companies were effectively pushed out of the U.S. banking system without any formal enforcement actions.
Government coercion, biased enforcement, and private pressure — all while denying
According to the document, the Federal Reserve, FDIC, and OCC utilized various tactics to influence bank behavior.
These tactics included “non-objection” letters, “pause” letters, and other forms of informal guidance aimed at dissuading banks from interacting with crypto companies.
Meanwhile, the SEC reportedly adopted a strategy of “enforce first, make rules never,” employing selective enforcement rather than clear regulatory frameworks to limit digital asset activities.
The report highlights SAB 121, an SEC guidance that effectively prevented banks from offering custody services for crypto assets.
The report exposes a scenario where regulators publicly denied any bias against digital assets while privately pressuring banks to sever ties with crypto firms. The report indicates that despite regulators consistently denying discouraging digital asset activities, evidence collected by the Committee demonstrates a pattern of private pressure and informal coercion.
Committee Republicans argue that these actions signify a resurgence of Operation Choke Point, a controversial program from the early 2010s that utilized regulatory and reputational pressure to dissuade banks from serving certain high-risk industries.
The report asserts that the strategies employed against crypto firms mirror those of Operation Choke Point: informal guidance, opaque supervisory expectations, and warnings of reputational risk.
“The absence of clear regulations combined with aggressive enforcement has created a chilling effect on the digital asset sector,” stated a Committee spokesperson. “Legitimate American businesses were compelled to relocate overseas or cease operations, not due to any wrongdoing, but as a result of regulatory overreach.”
Crypto firms faced challenges in maintaining bank accounts
The report features anecdotal testimonies from firms that struggled to retain bank accounts despite complying with all relevant laws.
One executive recounted repeated requests for documentation, abrupt account closures, and ambiguous warnings from compliance officers citing regulatory “uncertainty.”
Another individual described being effectively cut off from the U.S. banking system after submitting a routine regulatory filing.
Committee Republicans argue that this environment has stifled innovation and led to financial activities moving offshore.
They urge Congress and the Biden administration to reverse these policies, provide clear guidance, and ensure that legitimate crypto firms can access banking services without fear of arbitrary pressure.
The full report from the Committee is available on the House Financial Services Committee website.
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