US President Donald Trump Threatens to Punish Financial Institutions Refusing Services to Crypto Asset Businesses for Political Reasons.
President Donald Trump is preparing to issue an executive order targeting financial institutions accused of refusing services to businesses and individuals in the cryptocurrency field. According to The Wall Street Journal, the order could be signed this week to address allegations of political discrimination against crypto asset companies and conservative-leaning individuals.
The draft accessed by WSJ warns of financial penalties for banks disconnecting clients for political reasons, along with special oversight or other disciplinary measures. The order also directs regulators to investigate potential violations of existing laws, including the Equal Credit Opportunity Act, Antitrust Law, and Consumer Financial Protection Law, without specifically naming any financial institutions.
The "debanking" action – also called "Choke Point 2.0" – refers to an alleged systematic effort to disconnect crypto asset businesses from the traditional financial system, especially during the Biden administration when legal oversight of the crypto asset industry increased. The term originates from Choke Point 1.0, launched by the US Department of Justice in 2013, which aimed to restrict banking service access for industries considered high fraud risk.
Reactions from the Crypto Asset Industry and Response Measures
The draft order requires removing policies causing or contributing to debanking, asking the Small Business Administration to review lending partner activities and transfer serious violations to the Department of Justice for investigation and prosecution. During Trump's tenure, the Federal Reserve, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation declared they would stop considering "reputation risk" when evaluating bank-client relationships.
Crypto asset industry leaders have long accused being denied financial services for political reasons, while banks counter that decisions stem from legal risks and anti-money laundering compliance. After the November election, many industry leaders shared debanking experiences, including Marc Andreessen from a16z Crypto, Caitlin Long from Custodia, the Winklevoss twins from Gemini, Jesse Powell from Kraken, and Brian Armstrong from Coinbase.
In January 2025, the House Oversight and Reform Committee launched an investigation into debanking in the crypto asset industry, sending information requests to major exchanges. Eric Trump, the president's second son and currently involved in crypto asset projects, also declared his personal experience of bank account freezing for political reasons made him recognize the importance of crypto assets.
Trump, who previously criticized the crypto asset industry, changed his stance during re-election and received financial support from many influential industry figures. In his campaign, he committed to ending "Choke Point 2.0" and building a crypto asset-friendly legal framework, marking a significant shift in US digital financial policy.
