Key highlights:
- Trump plans executive order to probe banks cutting off crypto firms and conservatives.
- Regulators to check for antitrust, consumer protection, and fair lending violations.
- Crypto bosses accuse the Biden administration of systemic pressure on banks via FDIC audits.
The U.S. president will order a review of claims that cryptocurrency companies are being cut off from banking services. According to The Wall Street Journal, the White House may issue an order requiring banking regulators to investigate such cases.
Trump is preparing to sign an executive order that would compel banking regulators to investigate claims by the crypto industry and conservatives that banks are shutting down services for political reasons.
Under the draft order, regulators will determine whether financial institutions violated antitrust, consumer protection, or fair lending laws. Violators could face fines and legal action, while Trump could sign the order this week.
Crypto industry accuses Biden administration of systemic pressure
Cryptocurrency executives say the Biden administration has orchestrated a campaign to exclude cryptocurrencies from the financial system by directing regulators to pressure banks into dropping customers involved with digital assets.
Coinbase General Counsel Paul Grewal testified before Congress in February that the Federal Deposit Insurance Corporation (FDIC), during the Biden administration, “harassed banks” with audits and inquiries about cryptocurrencies and stablecoins until they “bowed under pressure.”
A Freedom of Information Act lawsuit against the FDIC revealed that the agency requested financial institutions suspend banking activities related to cryptocurrencies.
Operation Choke Point 2.0
Cryptocurrency venture investor Nic Carter coined the term “Operation Choke Point 2.0” in February 2023 to describe the crypto industry’s ongoing banking exclusion. The term references the U.S. Department of Justice’s Operation Choke Point against banks and short-term lenders in the 2010s.
Bank regulators may have to roll back internal rules that led banks to reject cryptocurrency clients.
Political motives under investigation
Regulators are also investigating banks’ roles in allegedly denying services to political conservatives, according to the order. The draft criticizes financial institutions that assisted federal investigators in the probe of the January 6, 2021, U.S. Capitol riot.
Trump’s order could mark a turning point for the crypto industry, which has struggled with regulatory pressure for years. The investigation will determine whether the complaints are valid or if the companies have exaggerated the problem’s scope.
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Source:: Trump to Order Review of Banking Restrictions on Crypto and Conservative Clients