SEO-Optimized Headline: House Republicans Accuse Biden Regulators of 'Operation Choke Point 2.0' in Sweeping Crypto Debanking Report
Engaging Introduction:
A new front has opened in the political war over cryptocurrency regulation in the United States. On December 1, 2025, House Republicans released a damning 51-page report accusing financial regulators under the Biden Administration of orchestrating a coordinated campaign to sever digital asset companies from the banking system. Dubbed "Operation Choke Point 2.0," the alleged initiative is said to have used supervisory pressure and non-public directives to debank at least 30 crypto entities between 2022 and 2024. The report, compiled by the House Financial Services Committee, presents internal documents, including Federal Deposit Insurance Corporation (FDIC) "pause letters," as evidence of a regulatory squeeze that forced layoffs and threatened company operations. This development arrives as the Trump Administration has moved systematically to reverse these policies, setting the stage for a pivotal legislative battle that will define the future of crypto in America's financial infrastructure.
The Anatomy of "Operation Choke Point 2.0": Pause Letters and Supervisory Pressure
The core of the Republican report hinges on documenting the specific tools regulators employed. Central to this are the FDIC's "pause letters," which were made public in February 2025. These letters, sent to approximately 24 banks, formally requested that institutions halt any expansion or initiation of crypto-related services. The report states these directives placed banks in a holding pattern, demanding extensive documentation and making it "impracticable for financial institutions to pursue digital asset-related activities."
Beyond the FDIC, the report details pressure from the Federal Reserve. It cites Fed supervisory guidance, specifically SR 22-6 and SR 23-8, which required banks to obtain written non-objection letters from their Fed supervisory team before engaging in any digital asset activities. This created a significant bureaucratic hurdle and chilling effect. The report frames these actions—pause letters, non-objection requirements, and other interpretive guidance—as a modern-day "Operation Choke Point," referencing a controversial Obama-era program that sought to discourage banks from servicing industries deemed high-risk, such as payday lenders and firearm dealers. The key distinction, as presented, is the target: the burgeoning digital asset sector.
Industry Impact: From Corporate Giants to Startup Survival
The human and corporate cost of this regulatory pressure is a focal point of the document. The report lists high-profile casualties including industry leaders like Coinbase, Marathon Digital Holdings, and founders from Uniswap, Ripple, and Gemini. Perhaps more telling are the operational crises described.
Industry executives reported bank accounts being closed with as little as 24-72 hours notice, often without clear explanation. For businesses, this sudden loss of banking access created immediate existential threats, forcing scrambles to meet payroll and cover basic operating expenses. A specific case highlighted is Anchorage Digital, an institutional crypto platform that laid off 20% of its workforce in 2023 directly after losing its banking access. This narrative builds a picture of an industry under siege not by formal law, but by administrative action that constrained its access to the lifeblood of any business: the banking system.
The Regulatory Arsenal: Non-Rulemaking Tools and SAB 121
A critical argument in the report is that this debanking campaign was executed without formal Congressional rulemaking processes. Instead, regulators relied on a suite of non-rulemaking tools. These included the aforementioned supervisory letters (SR 22-6, SR 23-8) and interpretive guidance like the FDIC’s IL 1179.
A standout instrument cited is the Securities and Exchange Commission’s Staff Accounting Bulletin 121 (SAB 121). Issued in March 2022, SAB 121 required firms that custody crypto assets to record them as liabilities on their balance sheets, a move critics argued made offering custodial services prohibitively costly for banks. The report categorizes SAB 121 as a key component of "Operation Choke Point 2.0," creating a significant barrier to mainstream financial institution involvement in crypto custody. By using bulletins, guidance, and supervisory pressure, the report alleges regulators erected formidable barriers while bypassing traditional public notice-and-comment rulemaking.
The Policy Reversal: Trump Administration Actions Since January 2025
The report does not exist in a vacuum; it serves as a documented indictment against the backdrop of significant policy shifts. Since taking office in January 2025, the Trump Administration has moved to systematically dismantle the regulatory framework described.
Key reversals documented include:
- Rescinding SAB 121, removing the controversial balance sheet requirement.
- Withdrawing the Federal Reserve’s supervisory letters (SR 22-6, SR 23-8) that required pre-approval for crypto activities.
- Eliminating "reputational risk" as a formal criterion in bank supervision across all federal banking agencies—a factor often cited in decisions to sever ties with crypto clients.
- Signing the GENIUS Act in July 2025, which established the first federal regulatory framework for payment stablecoins.
- Creating a Presidential Working Group on Digital Asset Markets, led by White House AI and Crypto Czar David Sacks.
These actions represent a stark directional change, seeking to roll back what the report characterizes as adversarial regulation and replace it with a more structured, if still evolving, framework.
The Legislative Roadmap: CLARITY Act and Beyond
Looking forward, the Republican report transitions from documenting past actions to advocating for future legislative fixes. Its primary recommendation is for Congress to pass the CLARITY Act (H.R. 3633). This bill, which passed the House by a vote of 294-136 in July 2025 and awaits Senate action, aims to clarify regulatory jurisdictions between the SEC and the Commodity Futures Trading Commission (CFTC) over digital assets.
Additional proposed legislative measures highlighted include bills to permanently prohibit the use of "reputational risk" in bank supervision and to reform the CAMELS rating system—the federal methodology for evaluating bank health—to prevent its use against banks serving lawful but disfavored industries. The report thus serves as both an exposé and a policy manifesto, providing ammunition for an ongoing legislative agenda focused on curbing administrative agency power over crypto.
Strategic Conclusion: Evidence, Politics, and an Industry at a Crossroads
The House Republican report on "Operation Choke Point 2.0" is undeniably a partisan document, offering a singular perspective on complex regulatory interactions. However, its power lies in its compilation of documentary evidence—the released FDIC pause letters, Fed guidance, and testimonies of disrupted businesses—which presents a tangible chronology of regulatory actions that correlated with widespread banking denials for crypto firms.
For the cryptocurrency industry and its observers, this report crystallizes several key truths about operating in America. First, regulatory risk remains profoundly political, with dramatic shifts possible between administrations. Second, access to banking ("on-ramps" and "off-ramps") is the most critical infrastructure vulnerability for crypto businesses, more immediate than any market price fluctuation. Finally, the battle is shifting from agency guidance to congressional lawmaking.
What readers should watch next is twofold: First, the fate of the CLARITY Act in the Senate will be a concrete measure of whether bipartisan consensus can be reached on foundational crypto regulation. Second, observers must monitor how effectively the Trump Administration's reversals—the rescinding of SAB 121 and withdrawal of supervisory letters—translate into restored banking relationships for companies like Anchorage Digital and others named in the report. The ultimate verdict on "Operation Choke Point 2.0" will be written not just in congressional reports but in whether U.S. digital asset companies can operate with predictable and stable access to core financial services moving forward