In a recent report, Republicans on the House Financial Services Committee unveiled alarming findings related to Operation Chokepoint 2.0, revealing that at least 30 crypto firms have been debanked over the past years. The investigation, which began in the 118th Congress, sought to uncover coordinated efforts by the Biden Administration to hinder digital asset businesses and individuals from accessing essential financial services. Biden Administration’s Actions Against Crypto The report details how regulators under the Biden Administration employed “vague rules” and excessive discretion to discourage banks from serving clients in the digital asset space. The Republicans further asserted that these regulators pressured financial institutions to distance themselves from digital asset clients through informal guidance, enforcement actions, and a lack of clear regulations, removing them from the financial system. Chairman Hill commented on the implications of this approach, stating, “Targeting Americans over their political views erodes trust in the financial system and undermines the core freedoms our nation was founded on.” However, Hill voiced confidence in repairing the damage done by the Biden administration, citing the current era of advancement for digital assets under President Trump , who has already signed one crypto bill—the GENIUS Act—and may soon sign the CLARITY Act. The report also highlighted that “informal communications,” such as interagency statements and interpretive letters, have specifically been used to discourage banks and other financial entities from working with digital asset firms. Regulatory Bodies Criticized For Inaction Key points raised in the report by Republicans include a failure by the Biden Administration to create a clear crypto regulatory regime , which has enabled federal financial regulators to effectively stifle innovation and limit activity within the sector. Rather than fostering a supportive environment for digital asset projects, Republicans claim that the administration’s approach leaned toward enforcement-based regulation, which further complicated matters for crypto firms. The report underscored the characterization of the digital asset ecosystem by the Biden Administration as prone to volatility and risk, particularly citing concerns over compliance with anti-money laundering (AML). However, Republicans argued that these concerns do not justify the aggressive tactics employed against the industry. The report also highlighted the roles of key regulators such as the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC). These entities, according to the report, failed to establish a coherent regulatory framework for digital assets and have resorted to enforcement actions against companies engaged in this market. Subcommittee Chair Meuser remarked, “This report documents how Obama-era practices were revived and expanded under President Biden—through pause letters, informal pressure campaigns, and regulation by enforcement that forced U.S. companies offshore.” He called attention to the leadership of individuals like President Trump, Secretary Bessent, Vice Chair Bowman, Comptroller Gould, and Acting Chair Hill, who are credited with restoring fairness and clarity in bank supervision . While the industry has seen major shifts under President Trump’s administration, Meuser stressed the need for Congress to codify protections against similar actions in the future, to prevent any resurgence of Operation Chokepoint. Featured image from DALL-E, chart from TradingView.com
