- The Subcommittee on Oversight and Investigations of the US House Financial Services Committee will be holding a hearing on February 6 to look at the systematic debanking of crypto firms under President Biden, which has come to be known as ‘Operation Chokepoint 2.0’.
- Some have alleged the debanking of crypto firms was politically motivated and directly ordered by the Biden administration in an attempt to thwart the US digital assets industry.
- A separate investigation into ‘Operation Chokepoint 2.0’ is also being conducted by the US House Committee on Oversight and Government Reform that aims to determine if the debanking was led by financial institutions or ordered by what it calls “political actors”.
Did the Biden administration covertly order banks to cut off services to crypto firms for political reasons? It looks like we might be about to find out.
The Subcommittee on Oversight and Investigations, which is part of the US House Financial Services Committee, has announced it will be holding a hearing on February 6 to delve into the debanking of cryptocurrency firms under the Biden administration.
This debanking and restriction of other financial services to crypto firms has become known as “Operation Chokepoint 2.0” and is alleged by some to have been ordered directly by the Biden administration in an effort to limit the growth of the crypto industry in the US.
According to the Committee memorandum the hearing, which is unambiguously titled “Operation Choke Point 2.0: The Biden Administration’s Efforts to Put Crypto in the Crosshairs,” will focus on understanding the negative effects of restricting the crypto industry’s access to financial services.
It will hear testimony from a range of industry leaders and experts, including Coinbase Chief Legal Officer, Paul Grewal and MARA CEO, Fred Thiel.
The subcommittee will also seek to “understand the depths of the problem and measures necessary to correct it.”
Related: John Deaton Offered to Lead Probe into Crypto Banking Blockade Under Trump
What is Operation Chokepoint 2.0?
The use of the phrase ‘Operation Chokepoint 2.0’ to refer to politically-motivated regulatory efforts to thwart the crypto industry was popularised by venture capitalist, Marc Andreessen, in an interview on Joe Rogan’s podcast last year.
During his appearance Andreessen said that under Biden, tech firms — and in particular crypto firms — had been systematically targeted and denied banking services, claiming:
Over 30 founders had been debanked in the last four years…Operation Choke Point 1.0 was 15 years ago against the pot and the guns, Choke Point 2.0 is primarily against their political enemies and disfavored tech startups.
Marc Andreessen, Co-founder of Andreessen HorowitzThe first ‘Operation Chokepoint’ Andreessen refers to was a program run under President Barack Obama in which financial services were restricted to industries identified as high risk, such as gun shops and marijuana dispensaries.
On X / Twitter, Steve McClurg, founder of crypto-focussed finance firm Canary Capital, claimed Andreesen’s estimate of 30 founders being debanked is just the tip of the iceberg:
Committee On Oversight and Government Reform Also Investigating Crypto Debanking
On January 24, the US House Committee on Oversight and Government Reform wrote to several leading figures in the crypto industry — including Andreessen, The Blockchain Association CEO Kristin Smith and Coinbase CEO Brian Armstrong — informing them that it is investigating what it calls the “improper debanking of individuals and entities based on political viewpoints or involvement in certain industries such as cryptocurrency and blockchain.”
The letter explained that the Committee was interested in “engaging with individuals and entities debunked by their financial institutions regarding their experience and the impact of debanking on their business operations.”
Related: Court Orders “Evasive” SEC to Explain Itself In A Legal Victory For Coinbase
According to the letter, the purpose of this investigation will be to determine if “this pattern of debanking stems from the financial institutions themselves or government actors.”
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