Digital currency enterprises have encountered repeated bank account terminations and rejections of financial services, often attributed to risk management policies. Many within the cryptocurrency sphere perceive this pattern of de-banking as a deliberate strategy intended to hinder the growth of digital assets, informally labeled “Operation ChokePoint 2.0.”
Following Donald Trump’s election victory, fueled in part by his pro-crypto stance, many anticipated the end of widespread de-banking. His campaign promises and initial policy inclinations suggested a more accommodating landscape for digital currencies, leading some to believe that financial institutions would loosen restrictions on their crypto-related clientele.
However, recent events imply that this practice is still deeply rooted. Last week, Alex Rampell, a partner at Andreessen Horowitz, cautioned that major banks are implementing what he termed “Operation Chokepoint 3.0” by levying increased fees on fintech and crypto applications for accessing account information or transferring funds to popular platforms such as Coinbase and Robinhood.
Echoing similar sentiments, Alex Konanykhin, CEO of Unicoin, disclosed to Cointelegraph that American banks are continuing to shut down accounts belonging to cryptocurrency firms without providing adequate explanations, despite growing political pressure to cease such actions.
“We have direct experience with this, as Unicoin and our associated companies have been de-banked by multiple banks without any justification,” Konanykhin stated. He identified five financial institutions, including Citibank, Chase, Wells Fargo, City National Bank of Florida, and TD Bank, that have severed ties with Unicoin or its subsidiaries in recent years.
Cointelegraph contacted all the mentioned banks for their comments, but had not received responses at the time of publication.
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Widespread “Nationwide Operation”
Konanykhin asserted that Unicoin has been de-banked by four banks in the current year alone, which he believes “suggests that Chokepoint is a broad, nationwide initiative.” Unicoin is a publicly reporting company with six years of audited financial records and over 4,000 shareholders.
Konanykhin further commented that this de-banking campaign has created “highly disruptive and damaging” conditions for crypto firms operating in the United States, restricting their access to essential financial resources and “stifling the American crypto industry.”
On Thursday, Bloomberg reported that President Trump is expected to sign an executive order instructing federal bank regulators to pinpoint and penalize financial institutions involved in de-banking practices.
The proposed order will reportedly mandate regulators to examine complaint data, and require banks under the supervision of the Small Business Administration to work toward reinstating clients who were unjustly denied services.
Konanykhin voiced optimism that President Donald Trump’s intended executive order aimed at curbing de-banking could provide relief. “The President personally understands the challenges of de-banking and appears committed to stopping this form of economic warfare against American businesses,” he stated.
He believes that ending de-banking could help the U.S. cryptocurrency sector regain its global leadership. “Ending the War on Crypto will greatly benefit the American crypto industry. This could have an international impact similar to that of Hollywood in entertainment, or Silicon Valley in information technology,” he noted.
Related: Trump to mandate investigation of crypto and political de-banking accusations: WSJ
Crypto reform relies on precise language of rules
Meanwhile, Elizabeth Blickley, a partner at Fox Rothschild’s Tax Controversy & Litigation Practice, explained that while Trump has tasked government agencies and Congress with investigating how crypto can be integrated into mainstream finance, significant progress will depend on the final, specific wording of regulations and laws.
She cited the recently enacted Genius Act, which grants the Federal Reserve’s Stablecoin Certification Review Committee 180 days to develop a regulatory structure.
Blickley cautioned that most bills introduced in Congress never make it past the committee stage, and that any resulting legislation is likely to face legal challenges from both proponents and opponents of the regulatory framework. “A regulation might superficially adhere to the President’s request or a law that has been passed, but still have minimal impact or produce skewed results simply based on the specific wording used,” she said.
For the time being, Blickley suggested, banks will likely maintain their conservative approach toward crypto until new rules clearly diminish perceived risks. “It is all about convincing risk-averse entities and individuals that crypto involves less risk,” she concluded.
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