U.S. President Donald Trump is reportedly preparing to sign an executive order that would direct banking regulators to investigate allegations of “debanking” targeting the cryptocurrency industry and conservative groups.
According to a draft of the order reviewed by The Wall Street Journal, financial regulators would be instructed to examine whether any banks or financial institutions violated antitrust laws, consumer protection statutes, or fair lending regulations. Entities found in violation could face fines or other legal consequences.
While Trump may sign the order as early as this week, sources noted that the timeline and details could still change.
Executives in the crypto industry have long accused the Biden administration of deliberately trying to isolate digital asset firms from the financial system by pressuring banks to avoid doing business with them.
Executive Order to Call for Sweeping Regulatory Overhaul
The reported draft executive order instructs banking regulators to eliminate any policies that may have led financial institutions to sever ties with certain clients, including cryptocurrency firms.
It also calls on the U.S. Small Business Administration to examine the banking practices tied to its loan guarantee programs for small businesses.
Additionally, the order directs regulators to refer potential violations to the Department of Justice for further action by the attorney general.
Back in June, The Wall Street Journal reported that the White House was preparing a similar order aimed at preventing banks from denying services to industries like crypto.
Allegations of “Operation Choke Point 2.0”
Crypto industry leaders have alleged that the Biden administration began cutting off their access to banking services in late 2022, following the collapse of FTX, which was exposed as a major fraud.
At a Congressional hearing in February, Coinbase Chief Legal Officer Paul Grewal testified that the Biden-era Federal Deposit Insurance Corporation (FDIC) effectively pressured banks by subjecting them to intense scrutiny and questioning over their involvement with crypto and stablecoins, until many institutions backed away from the sector.
A Freedom of Information Act lawsuit—backed by Coinbase—revealed that the FDIC had asked certain banks to pause crypto-related activities. Grewal argued this evidence confirmed that the industry’s concerns were not just “some crypto conspiracy theory.”
Crypto venture capitalist Nic Carter coined the term “Operation Choke Point 2.0” in February 2023 to describe what he viewed as a targeted effort to cut off the crypto industry from the banking system. The phrase draws inspiration from the original “Operation Choke Point,” a U.S. Justice Department initiative from the 2010s that pressured banks to sever ties with payday lenders and other high-risk industries.
Trump’s Executive Order to Address Alleged Politically Motivated Debanking
The executive order will reportedly also investigate claims that banks have denied or canceled services to political conservatives.
While the draft does not name specific institutions, it criticizes banks that allegedly assisted federal investigators in the aftermath of the January 6, 2021, Capitol riot, according to The Wall Street Journal.
Conservative groups have long argued that they’ve been targeted by financial institutions due to their political beliefs.
Banks, however, refer to the practice as “derisking,” a risk management strategy that allows them to close accounts if clients pose legal, financial, or reputational risks.
In response to growing scrutiny, the Federal Reserve announced in June that it would stop evaluating banks based on reputational risk—following similar steps taken by the Office of the Comptroller of the Currency and the FDIC.
