House Republicans revive criticisms of Biden's 'coordinated attack' on crypto, debanking concerns

House Republicans criticized what they described as the Biden administration’s "coordinated attack" on digital assets and urged regulators and fellow lawmakers to take steps to ensure the industry is not shunned from the financial system in the future.

Republicans on the House Financial Services Committee released a 53-page report on Monday titled "Operation Choke Point 2.0: Biden's Debanking of Digital Assets." The document stems from a probe started over the last few years into the previous administration's crypto policies. 

"The Biden Administration sought to make it nearly impossible to engage in digital asset-related activities," they said in the report. 

Republicans on the House Financial Services Committee said they are aiming to ensure that a third version of "Operation Choke Point" won't happen again. The phrase Operation Choke Point 2.0 was coined by Castle Island Ventures co-founder Nic Carter in 2023, drawing comparisons to the Obama-era effort to limit banking services for sectors viewed as high-risk, such as firearm dealers.

Fears that crypto participants are again being denied banking services have surfaced again recently after Strike CEO Jack Mallers said JPMorgan Chase closed his personal accounts without a proper explanation. 

Much of the congressional report on Monday focused on previous actions and statements made by regulators, including the former Securities and Exchange Commission Chair Gary Gensler's assertion that most cryptocurrencies are securities that drove the agency's “enforce first, make rules never" strategy.

Since the start of the Trump administration, the Federal Reserve, Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation have already pledged to stop weighing "reputational risk" when evaluating banks' customer relationships. The SEC is now led by Trump pick Paul Atkins, who has already taken a starkly different viewpoint from Gensler. 

Legislative concerns

This is now the second crypto-related report to come out of Congress over the past few days as lawmakers press on to advance legislation, like the Digital Asset Market Clarity Act, that would regulate the crypto industry at large. The Republican lawmakers called on regulators to prioritize rulemaking while also pushing for congressional legislation for crypto. 

On Capitol Hill, House lawmakers called on the Senate to pass Clarity, which would establish a regulatory framework for crypto in part through designating how the SEC and the Commodity Futures Trading Commission will oversee the industry. The full House passed Clarity over the summer. 

The Senate has its own version of that bill with plans from the Senate Banking Committee to tee up a vote this month. It would still need the Senate Agriculture Committee's sign-off before being reconciled with Clarity to get passed. The process has hit roadblocks, with Senate Banking Committee Chair Tim Scott, R-S.C., accusing Democrats of stalling in an interview with Fox Business last month. 

Democrats on the House Judiciary Committee released a report last week that said President Trump has turned the "Oval Office into the world’s most corrupt crypto startup operation, minting staggering personal fortunes for him and his family in less than a year." Bloomberg estimated in July that the sitting president has profited some $620 million from his family's crypto ventures, including the World Liberty Financial DeFi and stablecoin project, which lists Trump and his three sons as co-founders. The family also has a 20% stake in the mining firm American Bitcoin, and legislators have repeatedly raised concerns about the free-floating TRUMP and MELANIA memecoins launched the weekend before Trump took office.

Those conflicts of interest have been a meaningful concern for Democrats amid crypto market structure legislation talks.