Congressional committees to investigate ‘debanking’ of crypto

Bloomberg News

WASHINGTON — Republican leaders in both houses of Congress are digging into the so-called “debanking” of individuals by their banks, an issue that has emerged as a leading concern for the crypto industry and their congressional allies in the early days of the second Trump administration. 

Sen. Tim Scott, R-S.C., chairman of the Senate Banking Committee, said that the panel would hold a hearing Feb. 5 on debanking — a phenomenon whereby banks drop their customers, often without explanation, but allegedly in response to supervisory pressure from banking regulators. No witnesses have yet been named for the panel. 

“Debanking is un-American — every legal business deserves to be treated the same, regardless of their political beliefs,” Scott said in a statement. “Unfortunately, under Operation Chokepoint 2.0, Biden regulators abused their power and forced financial institutions to cut off services to digital asset firms, political figures, and conservative-aligned businesses and individuals.” 

The House Financial Services Committee will also hold a hearing, this one more explicitly focused on crypto, titled “Operation Choke Point 2.0: The Biden Administration’s Efforts to Put Crypto in the Crosshairs,” on Feb. 6. Witnesses have likewise not been disclosed for that hearing.

The House Oversight Committee, led by the committee Chairman Rep. James Comer, R-Ky., also said that it would investigate debanking.

In a letter to crypto industry titans — including Brian Armstrong, who founded Coinbase, and Marc Andreesen of the firm Andreesen Horowitz — Comer said that the panel is investigating whether “debanking” is caused by the industry or by regulators. The oversight committee is notably one of the few congressional committees with subpoena power.

Comer’s letter cites an anecdote in First Lady Melania Trump’s memoir in which she describes a bank terminating her account and refusing to open one for her son. She said the reasons they did so were “rooted in political discrimination.” 

“These examples are startling, and the Committee is investigating whether this debanking practice originates from the financial institutions themselves or from either implicit or explicit pressure from government regulators,” Comer said in the letter. 

The investigations come shortly after Trump, in a panel at Davos, criticized Bank of America CEO Brian Moynihan on the debanking issue. The first few days of Trump’s latest term have also seen major progress on issues that have frustrated crypto advocates for months. 

“I hope you start opening your bank to conservatives, because many conservatives complain that the banks are not allowing them to do business within the bank, and that included a place called Bank of America,” Trump told Moynihan onstage. 

Trump’s executive order on Thursday also promised “fair and open access to banking services” for the crypto industry.