In a move cheered by crypto advocates, President Donald Trump has signed an executive order aimed at ending what critics called “Operation Chokepoint 2.0” a practice where federal regulators allegedly pressured banks to cut off entire industries from the financial system.
The order, titled “Guaranteeing Fair Banking for All Americans,” bars federal agencies from using backdoor tactics to deny lawful businesses access to bank accounts simply because of their political views, affiliations, or the industry they operate in. For the U.S. crypto sector, which has long complained of being unfairly de-banked, it’s being hailed as a major victory.
But legal analysts warn that banks could still sidestep the rules labeling politically motivated denials as routine “risk management.”
A Brief History of ‘Operation Chokepoint’
The original Operation Chokepoint, launched under the Obama administration, was officially aimed at rooting out fraud. But critics claimed it was used to target politically disfavored industries.
Fast forward to 2023, and venture capitalist Nic Carter and others began accusing the FDIC and other regulators of quietly pressuring banks to sever ties with crypto companies a campaign they dubbed Operation Chokepoint 2.0. Evidence included sudden account closures, stern regulatory warnings about crypto “risks,” and heightened scrutiny after the collapses of Silvergate, Signature, and Silicon Valley Bank.
Many crypto businesses, hedge funds, and service providers found themselves cut off from banking services often without explanation. Coinbase’s Chief Legal Officer Paul Grewal noted that non-crypto clients didn’t face the same treatment.
What the Order Says
The executive order states:
“No American should be denied access to financial services because of their constitutionally or statutorily protected beliefs, affiliations, or political views. Banking decisions must instead be made on the basis of individualized, objective, and risk-based analyses.”
Importantly, the order doesn’t mention “crypto” by name. Instead, it applies broadly to any form of “politicized or unlawful debanking.”
New Oversight, New Faces
One notable change is that oversight won’t be left to traditional banking regulators like the Federal Reserve, the OCC, or the FDIC. Instead, the Small Business Administration (SBA) will be tasked with monitoring banks to ensure compliance a move that Caitlin Long, a well-known bitcoin advocate, called a “hidden gem.”
The SBA will be led by Kelly Loeffler, a bitcoin supporter, raising hopes in the crypto community that the agency will actively guard against discriminatory banking practices.
Why Critics Aren’t Fully Convinced
Despite the fanfare, Nic Carter and others see potential gaps. Carter warns that while the order bans government-driven debanking, banks could still claim a decision was based on “operational risk” rather than politics.
He draws a distinction between:
- Governmental debanking: When regulators pressure banks to drop clients for political reasons.
- Operational debanking: When banks make business-driven decisions—like avoiding unprofitable clients or industries viewed as reputationally risky.
The concern? Regulators who want to target certain industries could still make it look like a business decision. For example, a bank could close an account tied to politically sensitive donations by citing compliance costs instead of political bias.
Carter’s solution:
- Increase transparency so clients know exactly why they were dropped.
- Remove the “confidential supervisory information” seal that keeps many of these decisions hidden.
- Hold regulators accountable for any indirect political interference.
The Bottom Line
Senator Cynthia Lummis says “Operation Chokepoint 2.0 can never happen again,” but Carter remains skeptical. The executive order is a big win for the crypto industry and other affected sectors, but without strong enforcement and transparency rules, politically motivated debanking could still happen just under a different name.
As Caitlin Long puts it, the order is a step in the right direction. But the real test will be whether banks, regulators, and the new oversight body actually follow through.
