Administration of Trump focuses on "Operation Chokepoint 2.0" through a fresh executive order
In a move to counter alleged discriminatory practices, former President Donald Trump is preparing an executive order that aims to protect cryptocurrency companies and conservative organizations from perceived politically motivated banking exclusion. This phenomenon, dubbed "Operation Chokepoint 2.0," is said to have targeted these groups under the Biden administration.
The background of this controversy stems from the collapse of FTX in 2022, which reportedly led to increased scrutiny from U.S. regulatory agencies like the FDIC on banks serving crypto firms. This scrutiny, in turn, led to pressures for these banks to cease those services, as testified by Coinbase’s chief legal officer. The term "Operation Chokepoint 2.0" was coined by crypto venture capitalist Nic Carter in early 2023 to describe this perceived debanking phenomenon.
The proposed executive order, if signed, will direct federal banking regulators to investigate and root out discriminatory banking practices against crypto firms and conservative groups. It will focus on violations of equal credit laws, antitrust regulations, and consumer protection regulations in cases where financial institutions terminated customer relationships.
The order also criticises the role of financial institutions that helped federal investigators with probing the January 6, 2021, riots at the US Capitol. It will probe the role of banks in denying or cancelling services to political conservatives, without naming specific banks.
Banks found in violation could face financial penalties and regulatory enforcement actions. The order also includes oversight of institutions like the Small Business Administration to guard against political discrimination.
Moreover, the Federal Deposit Insurance Corporation (FDIC) is said to have asked certain financial institutions to pause crypto banking activities, according to a Coinbase-supported Freedom of Information Act lawsuit. The order will direct federal agencies to dismantle internal policies that enabled debanking and review Federal Reserve access for crypto firms.
The order further directs the US government’s Small Business Administration to review banking practices that guarantee the loans made by the agency to small businesses. If signed, this executive order will mark a significant step in addressing the alleged "Operation Chokepoint 2.0" and ensuring fair and equitable banking practices for all.
Coinbase continues legal battles to expose alleged "Operation Chokepoint 2.0" documents, with Grewal recently accusing the FDIC of systematic obstruction despite court orders compelling disclosure. The future of this executive order and its impact on the banking industry remains to be seen.
- The proposed executive order will direct federal banking regulators to examine violations of equal credit laws, antitrust regulations, and consumer protection regulations in cases where financial institutions terminate customer relationships, focusing particularly on cryptocurrency firms and conservative groups.
- The Federal Deposit Insurance Corporation (FDIC) is said to have asked certain financial institutions to pause crypto banking activities, a move that the upcoming executive order might direct federal agencies to dismantle internal policies that enabled debanking and review Federal Reserve access for crypto firms.
- In addition to federal banking regulators, the Small Business Administration will also be examined under this order, with a focus on reviewing banking practices that guarantee the loans made by the agency to small businesses.
- Banks found in violation of the equal treatment and fair banking practices outlined in the executive order could face financial penalties and regulatory enforcement actions, potentially impacting the banking industry in a profound way.
