OCC Debanking Report Shows ‘Choke Point 2.0’ Was No Fever Dream

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WHAT HAPPENED

The U.S. regulator for national banks pulled back the curtain on Operation Choke Point 2.0 this week, releasing its final report on debanking at the nation’s nine largest national banks.

Following an August 2025 executive order from President Trump, the Office of the Comptroller of the Currency (OCC) combed through nearly 100,000 complaints, hundreds of individual account decisions, and roughly 420,000 pages of internal documents from 2020 through September 2025. The OCC’s stark findings have Nic Carter, the crypto VC who has been on the forefront of OCP muckraking, doing a victory lap.

Banks relied on “reputational risk” policies with no clear or measurable standards, and those policies were used to cut off customers over their political, religious, and social views, the OCC’s review confirmed. Examples range from a JPMorgan-owned payments processor closing a merchant’s account for selling MAGA gear, to a Capital One business line turning away partisan groups on both sides of the aisle. Industry-wide (unofficial) restrictions on firearms, coal, Arctic drilling, private prisons, tobacco, and digital assets hit small and midsized firms hardest, while lucrative clients often got exceptions. The OCC also warns that some banks are simply rebranding reputation risk as “franchise” or “brand” risk, and notes that no bank has publicly acknowledged its past debanking decisions.

For crypto, it’s vindication, but does this mean we are protected going forward?

OUR TAKE

The regulatory landscape around banks has evolved drastically since I entered the workforce. I went through college at the beginning of the Great Financial Crisis, then worked on Deutsche Bank’s structured credit desk, focusing on CLOs and CDOs.

After the crisis, the banks were absorbed into the regulatory apparatus of the U.S. government. The Dodd-Frank Act and enhanced capital requirements for global systemically important banks (GSIBs) became an effective way for the government to regulate the broader financial system.

This face turn of banks from foes to friends of the regulators can be seen most clearly in the turnaround of the commentary from the Elizabeth Warren camp. To that crowd, banks used to be the enemies of Main Street; now they are central to making sure regulations are enforced and the will of the government enacted.

Toward the end of my career at Deutsche Bank, after Jan. 6, there was a stressful week or two on the trading desk. Desk heads and business managers were pulled in to decide whether to keep banking Donald Trump. The question being contemplated was reputational risk; would the profits from having Trump as a client be more than offset by the losses from upset clients taking business elsewhere? It was the first high-profile debanking driven by reputational risk, and we later saw the same thing happen to the artist Ye (formerly Kanye West), for his…colorful commentary.

Banks also worked the other side of the reputational ledger, polishing their image through ESG (environmental, social, and governance) investing, “socially responsible investing,” and other flavors of “stakeholder capitalism.” Having read plenty of ESG prospectuses during my time on the desk, I can tell you most simply didn't invest in certain categories (sin stocks, firearms, etc.). They also didn’t invest in anything actually productive on the E, S, or G front.

The ESG fad eventually faded. The pruning of “toxic” clients from the Rolodex did not.

Publicly, debanking was used sparingly. There were few explicit cases, the Canadian truckers during COVID being the notable one. The real activity was happening behind closed doors in Washington, under what critics referred to as Operation Choke Point 2.0.

The regulators took the lever that the banks had been using: the right to refuse business. Legally, banks don’t have to give anyone an account, they have the right to refuse or cease doing business with law-abiding people and businesses, and reputational risk was a convenient rationale to do so. With post-2008 regulation in place, the government had far more control over the banks than before. It could use that lever to target legal industries an administration disfavored: firearms, oil and gas, and, most relevant here, crypto.

Now the pendulum has swung back. The OCC report is welcome, and it proves that, hey, we in crypto were not crazy these past years. The crypto industry was being targeted by the government in an unfair manner. The facts support the good actors in the industry who were swept up in an opaque dragnet and what they have been striving toward. But the crypto industry, along with some of the affected banks, had the money to push back and the resources to investigate.

OCP 2.0’s targets have power and weight in the economy. The everyday Americans who are unbanked for similar reasons have no such voice. Plenty of studies show minorities remain underbanked in the U.S. So I’d welcome a push for greater fairness in banking, not just for sin stocks and crypto, but for everyone who is underbanked.

This all kind of comes together into one question: whose freedom is most paramount? Banks are businesses, and businesses typically aren’t compelled to serve people they don’t want to. “No shirt, no shoes, no service.” The executive branch and federal regulators are now challenging that assumption. If banks can’t refuse customers over perceived reputational risk, and given how much falls under the umbrella of “reputation,” do Americans have a right to banking services? And to be fair, high regulatory barriers to entry limit competition in banking, so it’s not as if spurned customers can just start their own bank.

It’s a laudable ideal that access to finance should be fair regardless of one’s politics. Because it flows from constitutional protections for opinion and speech, it starts to sound almost like a right. But that’s a big claim when you don’t even have a right to drive; that’s a privilege. (Ask a “sovereign citizen” what “travel” means and you may get a different answer.)

As a proponent of individual freedom, I am torn. I don’t like telling businesses they have to serve people they don’t want to, though The Civil Rights Act sets an appropriate precedent for addressing real harms. And I believe in your right to spend your money as you want. If Citizens United says money is speech, and banks can’t restrict your access based on your speech, does that mean you have a right to put your money in the banking system and use it?

Crypto has pursued going bankless as an ethos for years. OCP 2.0 was a U.S. operation, but groups worldwide have been cut off from financial services for their opinions. Crypto is facts-based and doesn’t judge on merit, unlike the traditional trust-based system, which is a machine made of man, and man has biases. I work in crypto because I don’t believe that system is fair. I want to help build one so intrinsically fair that the option to transact freely always exists, no matter what the current administration says.

Operation Choke Point 2.0 was real. Industries were systematically debanked amid government and regulatory pressure. There were no laws and no publications, just a back-door squashing of industries the administration of the day didn’t approve of. It can happen under any administration. We need a way to make sure nobody is targeted, no matter who’s in office. That could be a right guaranteed by law, or maybe, just maybe, a transition, driven by economic reality, to an open, blockchain-based financial system.

From that point of view, this report is a useful accounting. Maybe we will get a right to financial access. If we don’t, I’m still in the right place to push it forward.