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Key Takeaways:
- Trump plans to order bank regulators to investigate crypto and political debanking.
- The order aims to dismantle policies behind “Operation Choke Point 2.0.”
- Violations could lead to DOJ referrals and banking policy overhauls.
A draft executive order under review by the White House could soon shake up the banking industry’s treatment of both the crypto sector and political conservatives. According to the Wall Street Journal, former President Donald Trump plans to sign an order directing U.S. bank regulators to investigate alleged debanking practices, which critics say have unfairly targeted crypto firms and right-leaning individuals.
Executive Order Could Target “Operation Choke Point 2.0”
The crypto industry has long accused the Biden administration of waging a behind-the-scenes campaign—dubbed “Operation Choke Point 2.0”—to pressure banks into cutting ties with crypto clients. The draft order reportedly demands bank regulators examine whether such pressure violated antitrust, fair lending, or consumer protection laws. Financial institutions found in breach could face fines or legal consequences.
If signed, the order would also require regulators to scrap internal policies that may have contributed to debanking. Moreover, it calls for the Small Business Administration to review how its loan guarantees are handled by banks and mandates referrals of possible violations to the Department of Justice.
Crypto Leaders Say It’s About Time
Coinbase’s Chief Legal Officer Paul Grewal has previously testified that agencies like the FDIC pushed banks to halt services to crypto clients under regulatory pressure. A FOIA lawsuit even uncovered FDIC letters asking institutions to pause crypto-related banking activity—evidence that Grewal says validates the crypto sector’s complaints.
Venture capitalist Nic Carter coined the term “Operation Choke Point 2.0” in 2023 to describe the systematic exclusion of crypto from traditional finance—a strategy critics argue is reminiscent of earlier regulatory efforts targeting payday lenders.
Also Read: Is the FDIC Hiding Key Information? Coinbase Questions Extensive Redactions in Legal Battle
Political Debanking Also in the Crosshairs
The order reportedly extends beyond crypto, aiming to address claims that conservatives have also been denied financial services based on their political beliefs. While no banks are named in the draft, it criticizes institutions that cooperated with federal investigations into the January 6 Capitol riot.
The Federal Reserve and FDIC have recently pulled back from enforcing “reputational risk” policies that gave banks wide discretion to close controversial accounts. Trump’s proposed order could further curtail this discretion.
If enacted, the executive order could mark a turning point in U.S. banking oversight, pushing regulators to rethink their approach to politically sensitive clients and the crypto industry. As the 2024 election looms, the battle over banking freedom may become a key political flashpoint.
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