Coinbase Slams ‘Political’ Banking Rule Used to Pressure Crypto Firms
Coinbase has formally challenged what it describes as a “political” banking rule that it says was used to strain banks into reducing ties with crypto companies, including new weight to the rising U.S. debate over debanking and regulatory overreach.
In a public assertion and an in depth remark letter submitted to federal regulators, the change accused banking supervisors of misusing the idea of “reputational threat” to quietly limit lawful crypto exercise throughout the Biden administration.
Coinbase Supports OCC, FDIC Plan to Remove Reputational Risk Standard
Faryar Shirzad, Coinbase’s chief coverage officer, said the corporate helps a joint proposal by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation to eradicate reputational threat from their supervisory frameworks.
Shirzad mentioned that examiners at each businesses relied on the idea as a “supervisory hammer” to strain banks into dropping crypto purchasers, a follow the business has labeled Operation Chokepoint 2.0.
In its letter to the OCC and FDIC, Coinbase described reputational threat as obscure, subjective, and untethered from measurable monetary hurt or authorized violations.
The firm argued that financial institution supervision ought to focus solely on concrete dangers tied to security, soundness, and compliance with the regulation, warning that unquantifiable issues about public notion create room for political bias.
Coinbase mentioned reputational threat was used to discourage banks from offering core providers to crypto companies even when their actions had been authorized.
The change mentioned it skilled these pressures firsthand. Through Freedom of Information Act requests and subsequent litigation, Coinbase uncovered inside regulatory communications that it claims present crypto companies had been singled out behind closed doorways.
The firm mentioned these actions threatened its operations and disrupted banking entry for workers, reflecting what it referred to as a broader sample of secret supervision that insulated regulators from public accountability.
Coinbase is urging regulators to go additional than the present proposal by totally prohibiting any use of reputational threat or comparable ideas in financial institution supervision.
It warned that partial limits would permit the follow to return underneath a distinct label, leaving banks free to cite public or political notion alongside different dangers when denying providers.
The firm additionally referred to as for clearer guidelines tying antagonistic supervisory actions to particular elements corresponding to credit score, liquidity, operational, or compliance threat.
U.S. Regulators Probe Bank Restrictions on Crypto Firms
The dispute sits on the middle of a wider political battle over crypto debanking within the United States.
Crypto executives and Republican lawmakers have lengthy argued that regulators used casual steering, heightened scrutiny, and off-the-record warnings to push banks away from digital asset purchasers with out issuing formal bans.
Regulators have constantly denied coordinating such an effort, saying banks made impartial selections based mostly on anti-money-laundering obligations and security issues.
The problem intensified once more in December after JPMorgan Chase CEO Jamie Dimon rejected claims that his financial institution engages in politically motivated debanking.
His feedback adopted public accusations from crypto figures, together with Strike CEO Jack Mallers, who mentioned his accounts had been closed with out a clear clarification.
Dimon mentioned JPMorgan acts solely underneath authorized and regulatory necessities, not ideology, a stance echoed by different massive banks dealing with comparable allegations.
Regulators at the moment are conducting their evaluations, as in December, the OCC released preliminary findings showing that all 9 of the biggest U.S. nationwide banks imposed inappropriate restrictions on lawful companies between 2020 and 2023, together with digital asset companies.
@USOCC reveals 9 main banks, together with @jpmorgan “debanked” crypto and different lawful industries with inappropriate restrictions #CryptoNews #Bankinghttps://t.co/hZYJOCY88v
— Cryptonews.com (@cryptonews) December 11, 2025
Comptroller of the Currency Jonathan Gould mentioned the practices had been widespread and amounted to an improper use of nationwide financial institution charters.
The assessment was ordered under President Donald Trump’s August government order directing businesses to guarantee truthful entry to banking providers.
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