New Republican Bill Aims to End Debanking of Crypto Firms and ‘High-Risk’ Industries

The new Republican bill comes after congressional hearings on Operation Stranglehold 2.0 and bipartisan agreement that Stranglehold should be ended.

U.S. Senate Banking Committee Chairman Tim Scott of South Carolina plans to introduce a bill on March 6 to end regulation of reputational risk of bank customers, paving the way for an end to the discriminatory practice known as "debanking."

Debanking is when banks can choose not to do business with customers who present a "reputational risk." The Federal Reserve defines reputational risk as "negative publicity about an institution's business practices (whether true or not) that could result in a decline in its customer base, costly litigation, or reduced revenue."

At least 11 Republican lawmakers are co-sponsoring Scott's bill, and various banking groups are also planning to support it, according to the Wall Street Journal. Those groups include the Bank Policy Institute, which describes itself as a nonpartisan group representing major U.S. banks. JPMorgan Chase, the largest U.S. bank, has also expressed support for the bill.

Debanking is said to have affected companies in multiple industries over the past 20 years, including guns, federal prison contractors, marijuana, and cryptocurrency. The practice has become a hot topic over the past four years, with cryptocurrency advocates claiming that a movement to debank legal crypto companies in the U.S. is afoot.

Senators Kevin Cramer and John Kennedy announced in February 2025 that they would introduce a similar bill aimed at protecting fair access to financial services and ensuring that banks act in a “safe and sound manner.” In a nod to bipartisanship, the progressive American Civil Liberties Union has been opposed to the practice of debanking.

Crypto Debanking and “Operation Chokepoint 2.0”

In November 2024, Andreessen Horowitz co-founder Marc Andreessen claimed that more than 30 tech and cryptocurrency founders had been denied access to banking services in the U.S., sparking debate around the so-called “Operation Chokepoint 2.0” orchestrated by the Biden administration.

In February 2025, the newly elected Republicans held congressional hearings on the issue, revealing partisan tensions but surprisingly unanimously agreeing that debanking should be repealed. Even among outside sources contacted by Cointelegraph, there is uncertainty as to whether “Operation Chokepoint 2.0” is a real issue or just “verbal red meat for the Republican base.”

While Senator Elizabeth Warren did not specifically mention digital asset companies during a Feb. 5 congressional hearing on deregistering bank accounts, she did say that “if banks have a policy of routinely deregulating people’s bank accounts based on their beliefs or other illegitimate reasons, that is wrong and must be stopped.”

On Feb. 28, Caitlin Long of Custodia Bank said at ETHDenver that nothing has changed about crypto banking in the U.S. under the Trump administration. “The perception is that there has been a relaxation of regulation; no federal banking agency has really reversed any anti-crypto guidance.”