FDIC correspondence lends support to allegations of 'Choke Point 2.0' involving Coinbase's Chief Legal Officer (CLO)
In the world of finance, the term "Operation Choke Point 2.0" has been a contentious topic since late 2022. This term refers to the alleged discriminatory practices by federal agencies and regulators, particularly the FDIC under the Biden administration, that pressured banks to restrict or cease services to cryptocurrency firms following the 2022 FTX collapse. This resulted in a perceived "debanking" phenomenon where crypto companies struggled to maintain banking relationships.
In an effort to combat this issue, former President Donald Trump signed an executive order in August 2025. This order aims to end Operation Choke Point 2.0 by prohibiting regulators from using reputational risk to restrict banks from partnering with crypto businesses. The order requires agencies to review banks for discriminatory practices against crypto firms and refer violations to the Department of Justice for potential civil action.
The executive order also extends protections against banks denying services based on political beliefs, addressing complaints from both crypto companies and conservative groups who felt unfairly targeted. Crypto industry leaders and Republican lawmakers have welcomed the move as a corrective step to restore crypto firms' access to financial services and prevent politically motivated financial discrimination.
However, some concerns remain about ongoing challenges. Banks may still independently impose new fees or restrictions on fintech and crypto service providers without direct government pressure, illustrating that while the government action limits regulatory pressure, market dynamics among banks may still pose hurdles.
In response to the executive order, the FDIC, Fed, and Office of the Comptroller of the Currency stated in joint guidance in 2023 that banking organizations are neither prohibited nor discouraged from providing services to customers of any specific class or type, as permitted by law or regulation.
The incoming Trump administration is perceived as crypto-friendly by the crypto community. Donald Trump also picked David Sacks as "White House AI and Crypto Czar" to guide the administration's policy for AI and crypto.
Notably, the FDIC called for a "pause" on bank-crypto activity in 2022. This request was made in a letter to a bank, obtained through a Freedom of Information Act request by Coinbase-affiliated History Associates. The FDIC's "pause letters" functioned as cease and desist letters, according to Custodia Bank CEO Caitlin Long.
In summary, by 2025, Operation Choke Point 2.0 is officially condemned at the federal executive level, easing regulatory hurdles for banks serving crypto businesses. However, practical banking access challenges persist in some cases.
| Aspect | Status as of 2025 | |-----------------------------|-------------------------------------------------------------| | Operation Choke Point 2.0 | A term describing regulatory pressure on banks to avoid crypto clients starting late 2022 | | Regulatory Action | Trump’s 2025 executive order bans regulators from restricting banks' crypto partnerships via reputational risk | | Impact on Banks | Banks are under review for discriminatory practices; illegal denials can be prosecuted | | Crypto Industry Effect | Improved regulatory environment, but some banks may still self-impose restrictions | | Political Debanking Claims | Also addressed by the order to prevent political bias in banking services |
[1] Source: [Link to the source] [2] Source: [Link to the source] [3] Source: [Link to the source] [4] Source: [Link to the source] [5] Source: [Link to the source]
- The executive order signed by former President Donald Trump in 2025 aims to end Operation Choke Point 2.0, a controversial term that refers to the perceived discrimination against crypto businesses by federal agencies and regulators.
- The order also extends protections against banks denying services based on political beliefs, addressing concerns voiced by both crypto companies and conservative groups.
- The crypto industry leaders and Republican lawmakers view this move as a corrective step to restore crypto firms' access to financial services and prevent politically motivated financial discrimination.
){kind=link}