US Regulator Criticizes Major Banks for Restricting Crypto Businesses

OCC Report: Banks Imposed Unlawful Restrictions on Crypto Businesses

• The U.S. Office of the Comptroller of the Currency (OCC) has found that nine major banks imposed inappropriate restrictions on legal crypto businesses.
• Banks involved: JPMorgan Chase, Bank of America, Citibank, Wells Fargo, U.S. Bank, Capital One, PNC, TD Bank, and BMO.
• Between 2020-2023, these banks required extra approvals or restricted entire sectors, citing conflicts with corporate values.
• Other affected industries: oil and gas, firearms, and private prisons.
• The OCC warned future occurrences will lead to enforcement actions.
• This aligns with President Trump’s executive order from August aimed at penalizing banks unfairly debanking legal customers.

Implications for Crypto Firms

• Banks must now justify risk-based decisions individually instead of rejecting entire industries.
• Crypto firms gain a stronger position to contest account closures and service denials.
• No specific legal violations were noted, but the report signals a shift towards accountability in banking practices.

Context and Background

• The OCC's findings follow Trump's executive order targeting industry-specific debanking practices.
• The OCC recently confirmed banks can act as intermediaries in "riskless principal" crypto transactions.
• Trump-era proposals required banks to evaluate clients based on measurable risks rather than blanket sector rejections; these were sidelined during Biden's term.