Coinbase’s Chief Legal Officer, Paul Grewal, is set to testify before the US Congress this week as lawmakers investigate allegations that financial regulators systematically cut off banking access for cryptocurrency firms.
The hearing, titled “Operation Choke Point 2.0: The Biden Administration’s Efforts to Put Crypto in the Crosshairs,” will examine whether federal agencies, including the Federal Deposit Insurance Corporation (FDIC), pressured banks to distance themselves from digital asset businesses.
The hearing follows mounting concerns from the crypto industry, which claims that regulatory bodies deliberately sought to limit access to banking services.
With financial institutions severing ties with major crypto platforms, some industry players argue that government agencies have orchestrated a covert crackdown on digital assets.
Paul Grewal will appear before the House Financial Services Committee’s Subcommittee on Oversight and Investigations, alongside executives from MARA Holdings, WSPN, and Anchorage Digital.
The outcome of this hearing could influence the regulatory approach towards crypto banking in the US, determining whether stricter policies or greater financial inclusion will define the industry’s future.
Was crypto targeted? Evidence emerges
Concerns over the alleged financial blacklisting of crypto firms resurfaced last November when venture capitalist Marc Andreessen claimed that over 30 technology entrepreneurs, including those in crypto, had their bank accounts abruptly closed during Joe Biden’s presidency.
His comments on Joe Rogan’s podcast reignited fears that digital asset businesses were being sidelined without due process.
Newly obtained documents suggest that the FDIC may have advised banks to reduce their exposure to digital asset firms, triggering a wave of de-risking across the sector.
Crypto industry leaders argue that this regulatory stance mirrors the original Operation Chokepoint—a controversial initiative under Barack Obama’s administration that targeted industries deemed high-risk, such as gun sellers and payday lenders.
Unredacted records obtained by Coinbase indicate that banks were instructed to scrutinise relationships with crypto-related businesses, further intensifying accusations of undue regulatory influence.
The House Oversight Committee, led by Chair Rep. James Comer, recently launched a formal investigation into whether federal agencies acted outside their remit to restrict financial services based on industry type rather than legitimate risk assessment.
The FDIC has not publicly commented on these allegations. Regulatory bodies have previously denied that any coordinated effort was made to limit banking access for crypto companies.
Regulators under scrutiny
The Congressional hearing, scheduled for February 6, marks a pivotal moment for US crypto regulation. Lawmakers will question both industry executives and financial experts on whether regulators overstepped their authority.
Alongside Coinbase’s Paul Grewal, the witness list includes Anchorage Digital CEO Nathan McCauley, MARA Holdings CEO Fred Thiel, and WSPN CEO Austin Campbell. Legal and banking professionals, including Davis Wright Tremaine LLP’s Stephen Gannon and Old Glory Bank’s Mike Ring, will also provide testimony.
While some officials argue that tighter oversight is necessary to mitigate financial risks associated with crypto, industry leaders believe that targeted actions by regulators have hindered innovation.
With crypto banking access shrinking in recent years, the hearing will assess whether US financial regulators have unfairly restricted the sector’s growth or simply acted in the interest of financial stability.
The outcome of this testimony could shape future regulations governing crypto banking access, potentially prompting legislative changes to prevent regulatory overreach.
If Operation Chokepoint 2.0 is found to be a reality, the implications could extend beyond crypto, affecting broader financial access policies in the US.
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