Crypto’s Ongoing Battle: The ChokePoint Saga Continues

Despite hopes for a brighter future under the Trump administration, the crypto industry still finds itself grappling with the harsh realities of account closures and banking denials. This practice, labeled as de-risking, has been a thorn in the side of digital asset firms for years. Many within the industry argue that this isn’t just a series of unfortunate events but rather a calculated move dubbed “Operation ChokePoint 2.0.”

The Trump Administration’s Promises and the Reality Check

When President Donald Trump’s pro-crypto team took the helm, optimism surged. Campaign promises and initial policy steps hinted at a more open and supportive environment for cryptocurrencies. This led some to anticipate that banks might finally ease up on their stringent restrictions against crypto clients.

However, recent occurrences suggest that the debanking practice is far from over. Andreessen Horowitz partner Alex Rampell recently sounded the alarm on what he calls “Operation Chokepoint 3.0.” According to Rampell, major banks are tightening the noose on fintech and crypto platforms by hiking fees for accessing account data or transferring funds to companies like Coinbase and Robinhood.

The Unicoin Experience: A Case in Point

Backing up these claims, Alex Konanykhin, CEO of Unicoin, shared his firsthand experience with Cointelegraph. He expressed frustration over US banks shutting down accounts for crypto companies without any explanation, despite mounting political pressure to stop this practice.

“We have been directly affected,” Konanykhin said. Unicoin and its subsidiaries have faced debanking from several major banks, including Citibank, Chase, Wells Fargo, City National Bank of Florida, and TD Bank, over the past few years. These closures have created a challenging environment, hampering access to essential financial services and stifling the American crypto industry.

Is There Light at the End of the Tunnel?

In a bid to address these concerns, Bloomberg has reported that President Trump is planning to sign an executive order. This directive aims to hold financial institutions accountable for unjustly debanking clients. The order would instruct regulators to review complaint data and require banks under the Small Business Administration’s oversight to reinstate clients who were wrongfully denied services.

Konanykhin expressed optimism about the proposed executive order, hoping it could alleviate the industry’s struggles. “Ending this form of economic warfare could rejuvenate the US crypto market, potentially positioning it as globally influential as Hollywood or Silicon Valley,” he remarked.

The Road Ahead: Regulatory Changes and Challenges

While there is hope, Elizabeth Blickley of Fox Rothschild’s Tax Controversy & Litigation Practice offers a sobering reminder that real change hinges on the final wording of new regulations. The recently enacted Genius Act mandates the Federal Reserve’s Stablecoin Certification Review Committee to establish a regulatory framework within 180 days.

Blickley warns that many legislative efforts stall in Congress and even enacted laws might face legal challenges. “The devil is in the details,” she notes, pointing out that the impact and application of regulations can be significantly altered by the choice of words.

For now, Blickley believes banks will maintain a cautious approach towards crypto until clearer guidelines emerge that mitigate perceived risks. “It’s all about making the risk-averse feel like crypto isn’t as risky as they fear,” she concludes.

Image Credit: cointelegraph.com