House and Senate to Investigate Whether Biden Regulators 'Debanked' Crypto Industry in 'Un-American' Power Grab

An investigation in the U.S. House of Representatives and a hearing in the Senate will examine whether financial regulators during the administration of

A congressional investigation will examine whether financial regulators during the administration of former President Joe Biden deliberately cut off crypto industry leaders and others from the banking system in an inappropriate use of authority.

The U.S. House of Representatives and Senate will both hold hearings on the matter.

The House Oversight Committee is investigating whether the practice originates from the financial institutions themselves or from either implicit or explicit pressure from government regulators, according to a letter sent on Friday by Representative James Comer, the panel's chairman.

The Senate Banking Committee will hold a hearing on February 5 on "Operation Chokepoint 2.0," as Republican lawmakers and the digital assets industry have been calling the systemic severing of crypto insiders from U.S. banks, in reference to an earlier era's Operation Chokepoint.

Operation Chokepoint was a government-sanctioned effort to reduce risk in banking by encouraging the lenders to back away from legal but otherwise risky businesses. Those included payday lenders, firearms dealers and Native American tribes that operated online casinos.

While some financial institutions may have made decisions on crypto interests based on their own risk appetites or business plans, banking regulators such as the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency were public in their guidance that regulated banks seeking to do crypto business would face restrictions and additional scrutiny from the agencies.

However, a Coinbase pursuit of private FDIC communications with banks demonstrated that the agency directed them to stop pursuing digital assets services until the regulator had specific rules in place, which it wasn't developing.

"We are grateful to assist in the thorough investigation of this pernicious practice,” said Kristin Smith, CEO of the Blockchain Association, which also received the House committee's letter probing the trend.

Meanwhile, congressional Democrats have been focusing their own investigation requests on President Donald Trump's recently launched meme coin, $TRUMP. He's been accused of using the presidency to rack up billions of dollars, and they cite the token as a potential risk for dangerous conflicts of interest.