The US OCC confirms that nine banks have refused Crypto clients, and the Department of Justice will investigate illegal activities.

OCC first confirms that nine major banks excluded industries such as cryptocurrency, energy, and firearms from 2020 to 2023. The Trump administration halted “debanking” and called for restoring fair access. (Background: US OCC allows banks to facilitate cryptocurrency transactions and compete for Coinbase and Binance business) (Additional context: US OCC greenlights: banks can hold cryptocurrencies to pay Gas fees, specifically mentioning Ethereum(ETH)) The US Office of the Comptroller of the Currency (OCC) announced this week that it has officially confirmed that between 2020 and 2023, nine systemically important banks used high-threshold reviews to collectively refuse service to industries such as cryptocurrencies, fossil fuels, and firearms. This report marks the first written confirmation by regulators of the long-rumored “debanking” concerns within the crypto community and sets a tone for a turning point in the financial landscape following the August administrative order by the Trump administration.

The invisible high walls are named and exposed. The list includes JPMorgan Chase, Bank of America, Citibank, Wells Fargo, US Bank, Capital One, PNC Bank, TD Bank, and BMO Bank. OCC found that although these institutions did not explicitly refuse account openings, they raised compliance thresholds through “upgraded reviews,” effectively resulting in refusals. OCC Director Jonathan Gould criticized bank behavior sharply: “Banks are leveraging market power to conduct moral and political reviews, which has deviated from the essence of risk management.” OCC stated that if violations of fair access principles are found, cases will be referred to the Department of Justice.

From “Chokepoint 2.0” to “Fair Access” The weight of the report is rooted in the context of time. During the Biden administration, there was widespread speculation about “Operation Chokepoint 2.0,” where regulators, citing “reputational risk,” required banks to steer clear of controversial clients. With Trump returning to the White House this year and signing executive orders, the tone quickly shifted. The Consumer Financial Services Law Monitor pointed out that the new orders require banks to base decisions solely on “lawful commercial activities” and prohibit refusal of service based on political labels, effectively forcing Wall Street to dismantle the barriers built over the past three years.

Costs, Risks, and the “Bank Desert” Banks emphasize that refusals are not discrimination but necessary measures to combat money laundering and fraud. Internal sources pointed out that after the FTX incident, customer due diligence costs for crypto firms have doubled, and “no one wants to handle hot potatoes anymore.” However, withdrawing from mainstream banking services also has side effects. Many compliant crypto businesses have turned to offshore or secondary financial institutions, creating what is called the “crypto banking desert.” Caitlin Long, founder of Custodia Bank, believes that what truly stifles innovation is the implicit pressure from the Federal Reserve and FDIC on small and medium-sized banks, rather than single Wall Street decisions.

Legal Intervention Risks Rise The most concerning development is OCC considering involving the Department of Justice. CoinDesk reported that OCC is simultaneously working to revoke earlier letters that restricted banks from engaging in crypto custody and stablecoins. In other words, in the future, if banks exclude legitimate clients based on preferences, the compliance risks might outweigh the benefits of continuing to serve those clients. Under the framework emphasizing “political neutrality” during the Trump administration, Wall Street needs to reevaluate risks and rewards. OCC’s report is not only a reckoning with past practices but also a rewriting of future rules of the game. The gates that were closed are not fully reopened, but gaps have been pushed open by institutional forces, leaving space for the market and regulators to work together to restore the essence of financial services.

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