Trump’s Executive Order: A New Chapter within the Debanking Drama?

Plans to Investigate Alleged Debanking

In a move that’s sure to stir the pot, former President Donald Trump is reportedly gearing as much as sign an executive order. The order would instruct banking regulators to dig into accusations of debanking from each the crypto community and political conservatives. According to The Wall Street Journal, this draft order, if signed, would task regulators with investigating whether financial institutions have crossed lines regarding antitrust, consumer protection, or fair lending laws.

Should any banks be present in violation, they may face fines or other legal repercussions. While Trump could potentially sign this order as early as this week, the timeline stays fluid, with the White House possibly tweaking or delaying the plan.

Crypto’s Grievances Against the Biden Administration

Executives within the crypto industry have long voiced concerns that the Biden administration has been deliberately sidelining digital assets. They allege that financial regulators have been pressuring banks to distance themselves from crypto clients. This executive order could possibly be viewed as an attempt to handle such grievances.

Pushing for a Regulatory Overhaul

The draft order reportedly calls on bank regulators to eliminate policies that may need led banks to drop certain clients, like those within the crypto industry. It also tasks the Small Business Administration with reviewing the way it guarantees loans to small businesses. Additionally, the order suggests that some violations ought to be escalated to the Department of Justice for further motion.

Back in June, the Journal noted that the White House was considering an analogous order aimed toward stopping banks from denying services to sectors like crypto.

The “Operation Choke Point 2.0” Allegations

There’s been chatter within the crypto world a couple of so-called “Operation Choke Point 2.0.” The term, coined by enterprise capitalist Nic Carter, paints an image of a conspiracy where the Biden administration allegedly targeted the crypto industry post-FTX’s collapse in late 2022. It’s a callback to the unique “Operation Choke Point” from the 2010s, which targeted payday lenders.

Paul Grewal, Coinbase’s chief legal officer, testified at a Congressional hearing earlier this yr, alleging that the FDIC applied undue pressure on banks concerning crypto. A lawsuit brought under the Freedom of Information Act revealed that the FDIC did indeed advise some banks to pause crypto activities, lending weight to those claims.

Political Debanking Under the Microscope

Beyond crypto, the order is about to probe whether banks have unfairly denied services to political conservatives. While specific banks weren’t called out, the draft reportedly criticizes financial institutions believed to have assisted federal probes into the January 6 Capitol riots.

Conservatives have voiced concerns about banks allegedly denying them services based on political views. The banking sector refers to this as “derisking,” where banks have the discretion to shut accounts based on perceived risks.

In an interesting twist, the Federal Reserve, following moves by other agencies, announced it will now not scrutinize banks for reputational risk.

Legal Panel: Crypto’s Evolution

Crypto desired to overthrow banks, now it’s becoming them in stablecoin fight – an ironic evolution for an industry that when sought to upend traditional banking.