United States President Donald Trump has taken an important step against banking practices targeting the cryptocurrency sector.
President Trump aims to end what he calls “unfair” practices by federal regulators against financial institutions working with the cryptocurrency sector with the new executive order he signed today.
“The digital assets industry has been targeted by unfair banking disruptions. Such practices undermine public trust in the banking system and regulators, jeopardize livelihoods, freeze wages, and impose serious economic burdens on honest Americans,” the White House said in a memo.
The decree removes the concept of reputational risk, which the US Federal Reserve uses in banking oversight, from its oversight criteria. This concept refers to the possibility that institutions will lose customers or experience a decline in revenue due to negative press or public perception. While this term isn’t limited to crypto, industry representatives have argued that this rationale is being used to target crypto companies.
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The Trump administration’s decision follows recent complaints from crypto companies and individuals about banks closing their accounts without justification. Trump fulfilled his promise to end this practice, officially ending what the industry dubbed “Operation Choke Point 2.0.”
The term “Operation Choke Point 2.0” was coined in 2023 by Castle Island Ventures co-founder Nic Carter and compared to the Obama-era “Operation Choke Point” of 2013. At the time, access to banking services was restricted to sectors deemed at high risk of fraud and money laundering.
*This is not investment advice.