Congress probing crypto industry’s ‘systematic’ debanking under Biden regime

The House Committee on Oversight and Government Reform has issued a formal letter to multiple crypto firms and organizations, requesting evidence and accounts of instances where crypto firms and individuals have been systematically denied access to banking services.

The letter was addressed to several entities, including the Blockchain Association, Uniswap Labs, Coinbase, Payward, AH Capital Management, and Lightspark.

The Blockchain Association, representing some of the largest crypto firms and investors, confirmed that it had received the letter on Jan. 24. The organization praised Representative James Comer’s leadership and stressed the urgency of addressing this issue.

The investigation is part of the Oversight Committee’s broader inquiry into whether political motivations or regulatory overreach have systematically excluded crypto businesses from essential banking services. 

The committee’s letter cites several high-profile examples of debanking, including statements from Coinbase CEO Brian Armstrong and Uniswap Labs CEO Hayden Adams, who claimed their companies were abruptly denied banking services without explanation.

Emerging pattern

According to the Blockchain Association, a clear pattern emerged under the Biden administration in which legal crypto businesses were denied banking access for vague or undisclosed reasons. It argued that these actions stifled innovation and forced many companies to relocate or operate under uncertain conditions. 

In response, the association launched an anonymous tipline for individuals affected by debanking and filed multiple Freedom of Information Act (FOIA) requests to investigate possible regulatory interference.

The committee’s letter references former President Barack Obama’s administration and its alleged Operation Chokepoint, which targeted high-risk industries by restricting their access to financial services.

On Jan. 10, Federal Deposit Insurance Corporation (FDIC) interim Chair Travis Hill acknowledged the agency’s role in debanking crypto firms. However, he did not expressly confirm the existence of an effort such as Operation Chokepoint.

Swift action

The Blockchain Association and its allies have called for swift action, placing the issue of debanking at the top of their policy agenda. 

Following November’s election, the association sent a letter to President Trump and the new Congress, urging them to prioritize the protection of lawful crypto companies.

Senator Cynthia Lummis, a vocal advocate for crypto, vowed to prevent initiatives like Operation Chokepoint 2.0 in a statement following her nomination to lead the new Senate Banking Subcommittee on Digital Assets. 

The Oversight Committee’s investigation aims to determine whether financial institutions are acting independently or under direction from regulators to limit access to banking for crypto companies. 

It also seeks to uncover the broader implications for US innovation, entrepreneurship, and financial inclusion.

Critical moment for innovation

The committee’s findings could have significant implications for the future of crypto in the US, determining whether the industry can thrive under fair regulatory practices or continue to face barriers that stifle growth and drive innovation overseas.

The Blockchain Association stated:

“This saga shows why many are drawn to crypto in the first place. We want to live in a world where everyone controls their own financial destiny, free from undue political interference.”

Recently, President Donald Trump signed an executive order creating a working group focusing on crypto and the role of “crypto czar,” who will be responsible for fostering a regulatory framework for the industry.

Moreover, on his second day in office, Trump nominated Commissioner Mark Uyeda as acting chair of the US Securities and Exchange Commission (SEC). The following day, Uyeda created a task force within the regulator to bolster legal clarity for crypto in the US.

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