President Donald Trump is reportedly planning to sign an executive order that would direct U.S. bank regulators to investigate claims of unfair debanking made by cryptocurrency executives and political conservatives.
According to The Wall Street Journal, the draft order instructs regulators to examine whether banks have violated antitrust laws, consumer protection rules, or fair lending practices. If any violations are found, financial institutions could face fines or legal action. While the order may be signed this week, the timeline could still change.
Debanking refers to the practice of financial institutions denying or removing banking services from certain clients. The crypto industry has long alleged that under President Biden’s administration, regulators pressured banks to distance themselves from digital asset companies especially following the collapse of the crypto exchange FTX in 2022.
Operation Choke Point 2.0 and Regulatory Pushback
The crypto sector has referred to this trend as Operation Choke Point 2.0, a term coined by investor Nic Carter. It’s inspired by a past Justice Department effort to cut off certain high-risk businesses from banking.
- Paul Grewal, Chief Legal Officer at Coinbase, testified that under Biden, the FDIC bludgeoned the banks into avoiding crypto clients.
- A Freedom of Information Act request later revealed that the FDIC had indeed encouraged some banks to pause crypto-related activities adding weight to industry concerns.
- Trump’s draft order also instructs the Small Business Administration to review lending practices tied to bank guarantees and refers serious findings to the Department of Justice.
Probing Political Bias in Banking
The executive order would also address claims that banks have discriminated against conservative individuals and groups by canceling their accounts based on political beliefs. No specific banks are named, but the order criticizes financial institutions that reportedly assisted federal probes into the January 6 Capitol incident.
The banking industry refers to this as derisking, where banks end relationships with clients they view as a legal or reputational risk. However, the Federal Reserve recently announced it would stop examining banks for reputational risk matching moves by other key regulators.
Trump’s upcoming order aims to protect both crypto innovators and political voices from being sidelined by the financial system.
