OCC launches crypto banking after Trump vows to end Operation Stranglehold 2.0

OCC eases ‘burden’ on banks engaging in crypto activities after Donald Trump vows to end ‘ridiculous’ ‘Operation Chokepoint 2.0’

Hours after U.S. President Donald Trump vowed to stop Operation Chokepoint 2.0, a long-running crackdown that restricted cryptocurrency companies’ access to banking services, the U.S. Office of the Comptroller of the Currency (OCC) has relaxed its stance on how banks can engage in crypto activities.

“National banks and federal savings associations may engage in crypto asset custody, certain stablecoin activities, and participate in independent node validation networks such as distributed ledgers,” the OCC said in a statement on March 7.

New OCC guidance will ‘reduce burdens on banks’

In a document titled Interpretive Letter 1183, the OCC confirmed that financial institutions regulated by the OCC no longer need “no objection from the regulator” to engage in crypto-related activities.

“Today’s action will reduce the burden on banks engaging in crypto-related activities and ensure that these banking activities are treated consistently by the Office of the Comptroller of the Currency,” said Rodney E. Hood, acting director of the Office of the Comptroller of the Currency.

The agency said it made the decision because OCC staff now have a better understanding of cryptocurrencies and want to roll back previous strict rules to “encourage responsible innovation and promote transparency.”

While the industry welcomed the OCC’s recent letter, Caitlin Long, founder and CEO of Custodia Bank, said in a March 7 X post that Operation Chokepoint 2.0 “will not end” until the Federal Reserve and the Federal Deposit Insurance Corporation also withdraw their “anti-crypto guidance.”

Just hours earlier, Trump told a room full of cryptocurrency executives at the White House Crypto Summit on March 7 that he would “end Operation Chokepoint 2.0.”

“Some people really suffered, and what they did was ridiculous. In the end, they compromised, but they compromised for the wrong reasons, and they compromised just for votes,” Trump said.

Operation Choke Point 2.0

Operation Choke Point 2.0 has had widespread impacts on the industry in multiple countries and has become a major pain point for industry advocacy groups during the 2024 U.S. election.

“They are forcing banks to shut down cryptocurrency businesses and effectively blocking the transfer of funds between entrepreneurs and exchanges, and weaponizing the government against the entire industry,” Trump said.

“But I also understand that feeling, perhaps better than you do; all of this will soon be over.”

Many cryptocurrency companies have turned to stablecoins to fund their operations after losing their business accounts with traditional banking institutions in the de-banking operation.

On January 16, Wyoming Senator Cynthia Lummis sent a letter to the Federal Deposit Insurance Corporation (FDIC), claiming that a whistleblower informed her that the agency was suspected of destroying documents related to Operation Choke Point 2.0.

“If it is found that you or your staff intentionally destroyed materials or attempted to obstruct the Senate’s oversight function, I will quickly file criminal charges with the U.S. Department of Justice,” she said at the time.