Under President Biden, a specter haunted North America, a specter nobody could see except for those working at the intersection of Bitcoin and traditional finance.
Like a band of beleaguered Macbeths, haunted by solitary visions of Banquo, the bitcoin industry and its professionals labored under the shadow of Operation Chokepoint 2.0, an underhanded Biden-ear initiative with the explicit goal of debanking the crypto industry. Many outside the industry dismissed it as a conspiracy theory lacking evidence.
Well, it’s been a solid half decade for the conspiracy theorists, and it turns out they were right again on this one.
The U.S. House Committee on Financial Services provided the evidence last week in a report on its investigation into OCP 2.0.
For the first time, the report concentrated in one place key dates, events, and actions taken by the Biden-era agencies, Biden’s White House, and the Federal Reserve. And it spells out exactly how these actions stonewalled the industry, creating impossible regulatory standards and compliance catch 22s that, in the worst of cases, fomented the failure of Silvergate, Signature, and Silicon Valley banks in 2023.
Operation Chokepoint 2.0 was never on the books, and there were only a few agency level actions that were ever publicized (often under the janus-faced rationale that they were “anti-money laundering” and “anti-terrorism” measures). The operation was informal, and those who carried it out relied on confidential supervisory letters, private memos, and off-the-record meetings between agencies and banks to achieve their goals.
Thanks to the House report, we now have receipts for what these undisclosed actions looked like, plus a timeline of key events.
2021: Operation Chokepoint 2.0 begins
President Biden and his agencies began laying the groundwork for Operation Chokepoint 2.0 in 2021. The biggest action President Biden took in his inaugural year involved complicating Trump-ear guidance that allowed banks, among other things, to hold crypto.
The actions in 2021 culminated, however, with probes by the FDIC into banks dealing with crypto clients. This “learn more” phase set the stage for more aggressive actions in following years.
- 2021 | OCC: The exact date is not provided, but in 2021, Biden’s Office of the Comptroller of the Currency (OCC) issued Interpretive Letter 1179. IL 1179 formally told banks that they may provide crypto custody and use stablecoins and other distributed ledger systems for payments, but only if they receive a non-objection letter from the OCC. The letter set a precedent for effectively gagging bank efforts to legally provide crypto services with red tape; even when banks followed the regulations and laws on the books, agencies may have not issued their approval.
- May 17, 2021 | FDIC: The FDIC issued a Request for Information on Digital Assets letter to banks to learn about risks, benefits, and use cases for crypto in traditional banking. This exploratory phase would eventually evolve into the FDIC sending “pause” letters to firms from 2022 through 2024.
2022: Operation Chokepoint 2.0 heats up
If Biden’s first year in office was a dress rehearsal for Operation Chokepoint 2.0, then 2022 was Act 1, the first year when the administration and the Federal Reserve ramped up closed-door enforcement.
- February 7, 2022 | FDIC: Acting Chair Martin Gruenberg shared his 2022 priorities and singled out the need to “provide robust guidance” on digital assets. The report notes, however, that Gruenberg’s FDIC began “standing down” on “interagency crypto workstreams” by May 2022, effectively frustrating any interagency cooperation to derive clear guidance.
- March 9, 2022 | White House: President Biden signed Executive Order 14067, Ensuring Responsible Development of Digital Assets. The order states crypto firms should be regulated under the same rules as traditional finance, while also calling to “evolve” frameworks to accommodate the “new and unique” risks intrinsic to crypto.
- March 31, 2022 | SEC: One of the most consequential actions of OCP 2.0, the SEC’s Staff Accounting Bulletin (SAB) 121 set new standards for firms holding crypto. It required custodians to disclose the nature and amount of crypto held. But more notably, it also required firms to count crypto assets as a liability, forcing them to hold a corresponding asset to offset these liabilities. The report notes that this deviated from established accounting standards that treat crypto as assets and created onerous reserve requirements that discouraged banks from holding crypto on behalf of clients.
- April 7, 2022 | FDIC: Just a week after SAB 121, the FDIC issued FIL-16-2022, “Notification of Engaging in Crypto-Related Activities.” This letter mandated FDIC member banks to notify the agency if they engaged in (or were considering engaging in) crypto-related activity. The report claims that the FDIC used the information harvested during this phase to later send “pause letters” to roughly 24 institutions involved in crypto in the following years.
- April 2022 (through December 2024) | FDIC: The FDIC began issuing those “pause letters” in April 2022 following its earlier “Notification of Engaging in Crypto-Related Activities.” These letters, issued sporadically to some 24 institutions from 2022 through 2024, effectively told firms to cease crypto services until receiving explicit approval. Coinbase Chief Legal Officer Paul Grewal cited these letters in a 2025 Congressional testimony, saying they served as de facto “do not bank crypto orders” and led to systemic stress for banks serving crypto clients like Signature, Silvergate, and Silicon Valley Bank.
- August 16, 2022 | Federal Reserve: On August 16, 2022 the Federal Reserve released SR 22-6. The letter, Engagement in Crypto-Asset-Related Activities by Federal Reserve-Supervised Banking Organizations, essentially told banks that they don’t just need a permission slip from Uncle Sam to pass Go and collect crypto – they also need approval from Uncle Sam’s Monopoly Man. In addition to spelling out perceived risks with crypto, the letter reminds banks to follow state and federal law to ensure crypto activities are kosher, while also demanding that banks notify the Fed about any crypto services (or plans for such services). As the report points out, this created yet another regulatory burden and another shadow approval process.
- September 16, 2022 | White House: The first tangible action under Biden’s March 2022 executive order, the First-Ever Comprehensive Framework for Responsible Development of Digital Assets letter encouraged regulators to “aggressively pursue investigations and enforcement actions” against unlawful crypto firms. This enforcement-first approach, the report says, set the precedent for the crackdowns that would come in 2023.
2023: Operation Chokepoint 2.0’s fever pitch
In 2023, Operation Chokepoint 2.0 came to a head, with much of the prior year’s guidance culminating with new directives that created impossible standards for crypto-adjacent banks.
- January 2023 | Federal Reserve, FDIC, OCC: In the Joint Statement on Crypto-Asset Risks to Banking Organizations, the
unholy trinity of banking officials listed key risks for crypto assets while also not explicitly barring firms from engaging in crypto services. The ambiguity and risk-first approach exacerbated the chilling effect of previous actions, the report states. - January 12, 2023 | SEC: The SEC announced enforcement actions on Genesis and Gemini for an unregistered securities offering. These enforcements coincided with the House Financial Services Committee establishing the Subcommittee on Digital Assets. The report argues, as did many crypto industry commentators at the time, that the SEC timed enforcement actions at best to undercut the Committee’s work to establish clear guidelines and, at worst, to intimidate the industry.
- January 27, 2023 | White House: Fresh off of FTX’s spectacular self-destruction and the collapse of the crypto market, Biden’s White House issued a statement on The Administration’s Roadmap to Mitigate Cryptocurrencies’ Risks, in which it highlights the “risk of buying cryptocurrencies” while stating executive agencies had launched programs to “help consumers understand” these risks. As with almost all guidance under Biden, the report says, the note strikes a risk-first tone with regard to crypto.
- January 27, 2023 | The Federal Reserve: The Federal Reserve issued a policy statement that limited state member banks (as principals) to activities permissible for national banks, unless specifically exempt under federal law. The statement highlights that issuing tokens is “highly likely” to be inconsistent with “sound” banking practices. The report highlights that this significantly restricted banks from crypto custody and services, effectively barring them from banking the crypto sector.
- February 2023 | SEC: The SEC proposed changes to its custody rule, which would have placed new requirements on advisors that custody assets including crypto. SEC Commissioner Mark Uyeda commented at the time that the proposal would create a “no-win scenario” for advisors by imposing insurmountable requirements.
- April 14, 2023 | SEC: The SEC opened a comment period for a January 26, 2022 proposed order that would rewrite the SEC definition of an exchange to include decentralized exchanges, effectively circumscribing DeFi into the SEC’s regulatory periscope in what many considered overreach.
- April 27, 2023 | SEC: SEC Chair Gary Gensler tweeted an X video where he stated that most cryptocurrencies are securities. The SEC released a transcript of the call a week later on May 3.
- June 2-6, 2025 | SEC: On June 2, 2025, Congressional financial committees released a joint draft bill for comprehensive crypto regulations, and days later, the SEC filed 13 charges against Binance and its Founder Changpeng Zhao. Then on June 6, the SEC charged Coinbase for listing unregistered securities on the same day that Coinbase Chief Legal Officer Paul Grewal testified on behalf of the exchange during a House Agriculture Committee hearing on crypto regulations.
- August 8, 2023 | Federal Reserve: The Federal Reserve issued two supervisory letters: SR 23-7, the Novel Activities Supervision Program, and SR 23-8, the Nonobjection Process for Dollar Token Activities. These established programs to supervise “novel activities” including crypto, and required state member banks to procure non-objection letters from the Fed before using stablecoins for payments. As the report claims, many crypto industry proponents labelled this as a de facto prohibition of crypto services, one that increased regulatory burdens and stonewalled crypto services behind impossible-to-attain non-objection letters.
2024: Operation Chokepoint 2.0’s dying breath
By 2024, Operation Chokepoint 2.0 began sputtering out as agencies ran out of initiatives. The SEC was the only agency to take any substantive action over the year.
- February 6, 2024 | SEC: The SEC adopted the “Dealer Rule,” which expanded the definition of a “government securities dealer” in such a way that DeFi and crypto automated market makers might fit the definition. A federal court later vacated the rule, citing it as vague in application and an overreach of SEC jurisdiction.
- May 22, 2024 | SEC: Gensler released a statement criticizing the “Financial Innovation and Technology for the 21st Century Act” (FIT Act), despite refusing to provide comment or assistance on the Act’s prescriptions, the report claims.
2025: Operation Chokepoint 2.0’s death rattle
President Trump promised during his keynote at Bitcoin 2024 to put an end to OCP 2.0 and to “fire Gary Gensler on day one.”
Gensler resigned before Trump could have the chance. But on August 7, 2025, President Trump signed the executive order Guaranteeing Fair Banking for All Americans, effectively putting an end to Operation Chokepoint 2.0.
The first shots of the operation came in the salad days of Biden’s term, and it took three years for the truth of the operation to come to light amid Nic Carter’s exhaustive writing on the subject, Congressional testimony, Coinbase’s FOIA requests, and other revelations.
Taken alone, each federal agency’s actions may have been innocuous. But the coordinate, interagency effort created a regulatory climate of guidance by enforcement and near-impossible “ask for permission” standards for banks that were otherwise engaging in completely legally behavior.
The sheer extent of the damage didn’t become clear until after the trifold failure of Silvergate, Signature, and Silicon Valley Banks – the three most important banks for the cryptocurrency industry, which banked a number of businesses and professionals in the space.
By placing onerous requirements on these banks and dissuading other banks from providing banking services to crypto firms, Biden-era agencies financially marooned these firms and artificially constructed the conditions that toppled them.
