The US government under Joe Biden has allegedly been stifling the crypto industry through the process of debanking, which experts labeled “Operation Chokepoint 2.0.” With Donald Trump’s re-election, the crypto industry expects a reform that will lead to the US banking industry embracing cryptocurrencies. US lawmakers have set sight on the government’s regulatory overreach, sparking investor enthusiasm.
In a recent development, the US Committee on Oversight and Government Reform has initiated investigations on the alleged debanking of crypto companies and individuals. While debanking refers to the isolation of crypto firms from the banking sector, the US lawmakers’ move intends to put an end to the authority’s indirect control over the crypto space.
US Oversight Committee Probes into Operation Chokepoint 2.0
According to a Forbes report, the US Oversight Committee has launched investigations on the “improper debanking” of individuals and organizations related to crypto. Under the leadership of Chair James Comer (R-Ky.), the Committee aims to collect testimonies from affected individuals and companies.
On Friday, the US Oversight Committee sent a letter to industry leaders, revealing their investigation plans. By examining the groups claiming to be debanked, the committee seeks to determine whether the trend is driven by their independent decisions or by government overreach.
Industry Leaders Allege Government’s Indirect Control Over Crypto
The term “Operation Chokepoint” could be traced back to former President Barack Obama’s reign when financial services were restricted for high-risk industries. Reflecting on the term, Andreessen Horowitz co-founder Marc Andreessen called the process of debanking during the Biden era “Operation Chokepoint 2.0.”
Industry experts like Coinbase CEO Brian Armstrong and CLO Paul Grewal corroborated Andreessen’s comments. Grewal posited, “Financial regulators have used multiple tools at their disposal to try to cripple the digital-asset industry.”
Chokepoint 2.0: SEC’s Aggressive Regulation Sparks Backlash
Notably, Uniswap Labs Founder Hayden Adams complained that his bank accounts were closed without prior notice. He added, “I know many individuals and companies who have been similarly targeted simply for working in the crypto industry.”
Similarly, Brian Armstrong revealed that banks closed ties with more than 30 tech companies. He added that the US SEC and former Chair Gary Gensler attempted to “unlawfully kill our [their] entire industry.” He also addressed it as the Biden government’s “most unethical and un-American” action.
Meanwhile, Ripple’s CTO, David Schwartz, described Operation Chokepoint 2.0 as the government’s “indirect” regulation of the crypto industry.
Investigation on Debanking: What To Expect?
Reportedly, more than 120 crypto hedge funds were debanked over the past three years. While real estate and private credit investors enjoyed banking services, crypto hedge funds were denied the same facilities. As cited by the committee, First Lady Melania Trump shared her personal experience of being debanked, which she attributes to political bias.
With an active investigation, the Oversight Committee intends to protect crypto users and traders from unfair government control. The agency envisions ensuring an unbiased crypto trading atmosphere in the United States and thereby terminating Operation Chokepoint 2.0. The unredacted FDIC files that Coinbase secured will undoubtedly be useful in this investigation.
US Banks Remain Ready To Embrace Crypto
Recently, Circle CEO Jeremy Allaire expressed optimism about the future of crypto, anticipating that banks will soon facilitate cryptocurrency trading. He believes that Trump’s new crypto policies will cease Operation Chokepoint 2.0, collaborating with the banking industry.
At the same time, Bank of America’s CEO Brian Moynihan expressed the US banking industry’s willingness to accept cryptocurrencies. Wall Street giants are also eying the crypto market. They seek to make a strategic entry into the space to tap into its immense opportunities.
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