Democratic Rep Testifies, Calls Out Trump’s Bias

‘Operation Chokepoint 2.0’, the Biden administration’s alleged scheme to debank the US crypto industry, never existed according to Democratic Texas Representative, Al Green.

Testifying at the February 6 hearing of the House Financial Services Committee’s Oversight and Investigations Subcommittee, Rep. Green challenged the story being spun by Republican politicians and crypto industry heavyweights, claiming the alleged policy of debanking was a “fake program” which was “never initiated.”

So, this is a made-up statement. Somebody concluded that this is something that sells, so they’ve gone with 2.0.

Representative Al Green

During the hearing, Rep. Green also hit out at President Trump for pushing what Green called his “deregulatory pro-crypto agenda” while also launching his own memecoin, alleging a conflict of interest.

Related: John Deaton Offered to Lead Probe into Crypto Banking Blockade Under Trump

Rep. Green Says Regulators Provided Advice, Didn’t Order Debanking

In his testimony, Rep. Green claimed that the Biden administration hadn’t engaged in some kind of orchestrated, secretive program to thwart the US crypto industry at all. Instead, claimed the lawmaker, the Federal Deposit Insurance Corporation (FDIC) and other financial regulators (presumably including the SEC and CFTC) had simply warned financial institutions about the risks of working with crypto firms — but there was no order requiring financial institutions to cut-off banking services to the crypto industry.

Regulators asking banks to consider the risks associated with the cryptocurrency industry does not amount to debanking.

Representative Al Green

This view was supported by Shayna Olesiuk, the Director of Banking Policy at Wall Street watchdog group Better Markets, who submitted written testimony to the hearing highlighting the risks crypto introduces to the banking system and the obligation of regulators to protect regular Americans:

Financial experts and regulators have recognized the risk that cryptocurrencies present to the banking industry and financial stability…

Shayna Olesiuk, Director of Banking Policy at Better Markets

In short, what’s really at stake here is the responsibility of regulators and banks to act in the best interest of the public and Main Street Americans. The facts and evidence show that standing with crypto means standing with those who engage in very high risk if not illegal and criminal activities with a highly volatile product that has no legitimate social use and that could endanger the entire financial system and, ultimately, the economy.”

Industry Says Regulators Pursued ‘Regulation Through Exhaustion’ Strategy

During the hearing, Coinbase’s Chief Legal Officer (CLO) Paul Grewal claimed key regulators misled the public by making statements suggesting crypto was subject to the same treatment as other industries while also issuing letters to financial institutions warning them against working with crypto firms.

Previously Coinbase had led a Freedom of Information Act lawsuit against the FDIC which revealed the regulator had sent letters to many banks in 2022 warning them to “pause all crypto asset-related activity”.

Grewal further testified that despite the government’s public statements suggesting crypto should have the same access to banking services as other industries, it had in fact pursued a strategy of “regulation through exhaustion”. 

You had question after question raised if even a hint of interest was shared that the bank wanted to enter into a basic service for its customers involving crypto or to facilitate basic crypto transactions.

Paul Grewal, Coinbase Chief Legal Officer

Following the hearing Grewal took to X / Twitter to call for legislative reform to prevent further debanking of the crypto industry:

Our financial system can’t improve while bureaucrats with unchecked power can stop the crypto services that banks and their customers want. We need legislation to stop future debanking and establish a clear set of rules for modern finance.

Paul Grewal, Coinbase Chief Legal Officer