In 2023, the collapse of three crypto-friendly banks left startup companies without accounts overnight, bringing the debanking issue back into focus. Now, market sources report that former U.S. President Trump is drafting an executive order to end the "Operation Chokepoint 2.0".
Draft Executive Order: Prohibiting Political Blacklisting
According to a report by Cointelegraph citing WSJ, the draft specifically stipulates that banks cannot refuse to open accounts or freeze funds solely because a client is involved in the crypto industry or holds specific political views. The OCC, FDIC, and Fed will be authorized to penalize discriminatory behaviors, aiming to provide crypto companies with fair basic financial channels.
Operation Chokepoint 2.0 Aftermath
Debanking is not a new phenomenon. The 2013 Chokepoint operation targeted high-risk industries, resurfacing in 2023 as "Operation Chokepoint 2.0". After the collapse of Silicon Valley Bank, Silvergate, and Signature, around 30 tech and crypto startups were forced to close or have their loans withdrawn. Custodia Bank suffered millions of dollars in losses due to difficulties in obtaining stable banking partners.
Fed's Attitude Shift Releases Positive Signals
In April this year, the Fed withdrew guidelines requiring banks to pre-report crypto business, and in early June, removed the "reputation risk" assessment factor. On June 24, Chairman Powell publicly stated:
"Banks can provide banking services and conduct related business to the crypto industry, provided that the safety and soundness of the financial system are ensured."
This statement laid the groundwork for banks to restart crypto custody, USD deposits and withdrawals, and stablecoin clearing.
What is Debanking?
Debanking refers to banks or financial institutions terminating or limiting financial services to certain individuals, businesses, or industries, such as closing bank accounts, refusing loans, or payment processing services.
In the cryptocurrency realm, debanking is often referred to as Operation Chokepoint 2.0, indicating banks limiting or terminating services to crypto companies (such as exchanges, wallet providers, or blockchain startups) under potential regulatory pressure. For example, banks might refuse to open accounts for crypto companies or suddenly close existing accounts, which significantly impacts these companies' operations.
