U.S. President Donald Trump is expected to sign an executive order this week that instructs federal banking regulators to investigate claims of “debanking”, the alleged denial or closure of financial services, targeting both the cryptocurrency industry and political conservatives.
According to a report from The Wall Street Journal, the order will direct regulators to examine whether financial institutions have violated antitrust laws, consumer protection laws, or fair lending practices in their decisions to cut ties with certain customers. Entities found in violation may face fines or legal action.
It also directs the Small Business Administration (SBA) to review its loan guarantee practices. Some violations may be referred to the Department of Justice.
The order specifically addresses concerns voiced by crypto executives, who allege that the Biden administration had pressured banks into distancing themselves from the digital asset sector, particularly following the 2022 collapse of crypto exchange FTX.
The term “Operation Choke Point 2.0”, coined by crypto investor Nic Carter, refers to what many in the industry see as a covert campaign to cut off crypto’s access to the traditional banking system. A Freedom of Information Act (FOIA) lawsuit supported by Coinbase revealed that the Federal Deposit Insurance Corporation (FDIC) had, in some instances, requested banks to pause their crypto-related activities.
The executive order will also investigate claims that some banks denied or canceled services based on customers’ political beliefs, particularly targeting conservative groups and individuals. While the draft order does not name specific banks, it criticizes institutions that reportedly assisted federal probes into the January 6, 2021 Capitol riots.
The banking industry refers to such account closures as “derisking,” a strategy used when clients pose a potential legal, financial, or reputational risk. However, the Federal Reserve announced in June that it would no longer assess reputational risk in its examinations—aligning with recent moves by the FDIC and the Office of the Comptroller of the Currency (OCC).
In addition to ordering investigations, Trump’s directive would require agencies to repeal any internal policies that may have encouraged debanking practices. The Small Business Administration (SBA) is also being tasked with reviewing its loan guarantee programs to ensure small businesses are not being unfairly excluded from banking support.
The executive order could represent a turning point for crypto and political freedoms in finance, as it challenges longstanding practices in the U.S. banking sector and opens the door to greater protections for digital asset firms and politically marginalized individuals.
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