Banks and Crypto: The Unseen Pressure

Overview

• Report Details: 50-page document
• Focus: Banks pressured to cut ties with crypto companies
• Nickname: "Operation Choke Point 2.0"

Regulatory Tactics

• Informal Guidelines: Used instead of formal rules
• Companies Affected: At least 30 forced out of banking system
• Methods Used:
• "Non-objection" letters
• "Pause" letters
• SEC's Role:
• "Enforce first, make rules never" approach
• SAB 121: SEC guidance stopping banks from offering crypto custody services

Regulatory Actions

• Public Denial: Regulators denied bias against digital assets
• Private Pressure: Banks pressured to cut ties with crypto firms
• Historical Context: Similar to early 2010s "Operation Choke Point"
• Targeted banks serving high-risk industries
• Used regulatory and reputational pressure

Impact on Crypto Sector

• Lack of Clear Rules: Aggressive enforcement hurt digital-asset sector
• Business Impact: Forced legitimate American businesses to move abroad or shut down

Crypto Firms' Experiences

• Challenges:
• Repeated requests for documents
• Sudden account closures
• Vague warnings from compliance officers
• Cited regulatory "uncertainty"

Republican Committee's Stance

• Concerns:
• Environment stifled innovation
• Driven financial activity offshore
• Demands:
• Congress and Biden administration to change policies
• Clear guidance to ensure legitimate crypto firms can access banking services