Congress Investigates Biden-Era Debanking of Crypto Industry Leaders
The U.S. House of Representatives and Senate are investigating whether financial regulators under former President Biden improperly restricted crypto industry access to banking services.
- Senate Banking Committee Chair Tim Scott scheduled a hearing on February 5 to address concerns over "debanking" practices.
- Scott described the actions as an abuse of power under "Operation Chokepoint 2.0," aimed at cutting off digital asset firms and conservative-aligned businesses from banks.
- The House Oversight Committee is exploring if the debanking originates from financial institutions' choices or government pressure.
- Some banks may have independently decided to limit crypto exposure based on their risk assessments.
- Regulators like the FDIC indicated that banks engaging with crypto would face scrutiny, affecting their willingness to offer services.
- Coinbase uncovered communications suggesting the FDIC directed banks to halt crypto services until new rules were established.
- Simultaneously, Democrats are investigating Donald Trump's meme coin, $TRUMP, citing potential conflicts of interest.
- A separate hearing by the House Financial Services Committee is set for February 6 regarding these issues.