The board of directors at the Federal Deposit Insurance Corporation is preparing to discuss proposed regulations that may affect cryptocurrency companies amid claims of debanking.
In a notice released on Thursday, the FDIC announced that its board would review a proposed rulemaking “concerning the prohibition of using reputation risk by regulators.” Although the agenda did not specifically refer to debanking issues linked to digital assets, acting FDIC chair Travis Hill has previously criticized regulators for leveraging “reputation risk” to prevent some banks from engaging in cryptocurrency activities, such as allowing clients to transfer funds to exchanges.
US President Donald Trump used the term in an executive order from August “guaranteeing free banking,” asserting that allowing regulators to access reputation risk could lead to “politicized or unlawful debanking.” The order did not specifically reference digital assets.
Prior to Trump’s presidency and the signing of the executive order, numerous individuals in the cryptocurrency sector alleged they were systematically denied access to US banking services as part of a coordinated effort by authorities due to their connections to digital assets.
Court documents made public in December through a Freedom of Information Act request with the FDIC revealed that the regulator had instructed certain institutions to “pause all crypto asset-related activity” in 2022.
Related: Debanking in the crypto sector is ‘still happening’ as banks maintain Chokepoint policies
The alleged measures, referred to as “Operation Chokepoint 2.0” by some, became a focal issue for Trump and many Republicans during the 2024 elections. After Trump won the election and appointed Hill, the acting FDIC chair stated that the regulator would be “reevaluating [its] supervisory strategy with respect to crypto-related activities.”
Cointelegraph attempted to contact the FDIC for a comment but had not received a reply by the time of publication.
Current US government shutdown under Trump
On Tuesday at midnight, the US government ceased operations after lawmakers failed to pass a funding extension beyond October 1.
While the shutdown has drastically reduced functions at US financial regulators like the Securities and Exchange Commission and the Commodity Futures Trading Commission, the FDIC indicated that it would remain “open and operational” regardless of the duration of the political standoff.
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