House Report: Biden-Era Regulators Pressured Banks to Cut Crypto Access, Reversals Under New Administration
A 51-page House Republican report released Dec. 1 finds that Biden-era regulators used supervisory tools—notably FDIC “pause letters,” Federal Reserve supervisory guidance (SR 22-6, SR 23-8, IL 1179) and the SEC’s SAB 121—to pressure banks to restrict or terminate services for crypto firms between 2022 and 2024. The report says at least 30 digital-asset firms and individuals (including Coinbase, Anchorage Digital, Marathon Digital, Uniswap, Ripple and founders of Gemini) lost banking access, causing abrupt account closures, payroll interruptions, layoffs (Anchorage cut about 20% of staff), and operational disruption. FDIC pause letters were sent to roughly 24 banks, requiring suspension of new crypto services and extensive documentation. The report frames these actions as an informal “Operation Choke Point 2.0” that avoided formal rulemaking. Since January 2025 the new administration has reversed several measures—rescinding SAB 121, withdrawing Fed pre-approval guidance, removing “reputational risk” as a supervisory criterion, advancing the GENIUS Act for payment stablecoins and creating a Presidential Working Group on Digital Asset Markets. Congress is considering additional legislation such as the CLARITY Act. For traders: the report underscores regulatory and banking-access risks as market drivers. Short term, policy reversals could ease custody and banking frictions and improve institutional flows; long-term outcomes depend on pending legislation and whether supervisors revert to informal pressure tactics. Primary keywords: crypto regulation, banking access, SAB 121. Secondary/semantic keywords: debanking, FDIC pause letters, stablecoin legislation, CLARITY Act, GENIUS Act.
Neutral
The report highlights regulatory intervention that materially reduced banking and custody options for crypto firms—an event that historically exerts downward pressure on institutional inflows and can raise short-term volatility. However, the recent policy reversals (rescinding SAB 121, removing pre-approval and reputational-risk criteria, and advancing stablecoin legislation) reduce near-term operational frictions and could encourage renewed institutional participation. Net effect on prices is therefore mixed: upside from eased custody/banking access and pro-crypto legislation tempered by lingering legal and legislative uncertainty and the potential for regulators to resume informal pressure tactics. For the specific projects mentioned (Coinbase, Anchorage, Ripple, etc.), the news mainly affects institutional access and custody risk rather than token fundamentals. Traders should expect increased volatility around legislative milestones and supervisory guidance updates; market direction will hinge on concrete legal outcomes (e.g., passage of CLARITY Act) rather than the report alone.