Crypto and banking sector executives gave testimony on Operation Choke Point 2.0, its scope, and solutions to address its consequences at a House committee hearing titled “Operation Choke Point 2.0: The Biden Administration’s Efforts to Put Crypto in the Crosshairs” today.

Coinbase Chief Legal Officer Paul Grewal, CEO of digital payments company WSPN Austin Campbell, blockchain firm MARA CEO Fred Thiel, and Director of Banking Policy at Better Markets Shayna Olesiuk addressed the committee. Grewal, Campbell, and Thiel testified that the crypto industry was systematically targeted by OCP 2.0, while Olesiuk claimed crypto businesses were “lawbreakers” who “chose to engage in widespread, flagrant illegal conduct.”

Broadly, attitudes at the hearing broke down on partisan lines — republicans like Dan Meuser called OCP 2.0 a “serious overreach” by the Biden admin, while Rep. Al Green, who yesterday called for the impeachment of Trump, called Choke Point 2.0 “fake.”

“It's immensely validating that both the House and the Senate are looking into OCP 2.0,” VC and Castle Island Ventures co-founder Nic Carter, who broke OCP 2.0 on Pirate Wires and coined the term, told us today. “The story that we reported in 2023 is gradually being confirmed by Congress, through litigation and document releases.

“It’s a shame that it took a change in administration for this issue to be belatedly looked into. In order to stop Operation Choke Point 3.0, we need to end the politicization of banking forever. This will likely require a legislative solution, or a full overhaul of banking regulation.

“Overall these hearings confirm the undeniable power of citizen journalism to elevate overlooked scandals to the public consciousness,” he said.

The Hearing

Rep. Dan Meuser (R-PA) opened the hearing by characterizing Choke Point 2.0 as a serious effort to debank the industry, and making a comparison to the Obama era Choke Point, which targeted disfavored industries such as guns. Choke Point 2.0 was a “serious overreach,” he said.

Rep. Al Green (D-TX), who spoke next, called Choke Point 2.0 “fake.” The concerns of banking regulators were “well-founded,” he said, and none of their actions in OCP 2.0 “amounted to debanking.” Green spent the rest of his opening statement characterizing Choke Point 2.0 as a Trump-led agenda to promote the crypto industry.

WSPN’s Austin Campbell described Operation Chokepoint 2.0 as a covert effort by U.S. banking regulators to deny the crypto industry access to financial services from 2022 to 2024 in his opening statement. Comparing it to past debanking of industries like firearms and payday lenders, he argued that regulators “obfuscated, denied, and covered up” their actions while depriving law-abiding businesses of due process.

Campbell’s testimony focused on the need for banking reform, and offered specific recommendations to ensure that debanking for political reasons never happens in the US again. He called for written, public banking guidance, disclosure of account closures, and an end to regulators using “reputational risk” as a pretext for debanking customers. Without reform, he warned, future administrations could use the same tactics to debank any disfavored industry.

“We have a governance issue with banking regulation writ large,” he said. “The fact that supervision is often confidential, hidden, and nobody knows exactly what happened, itself is a problem that leads to abuse. Without addressing this, there will be hearings on Operation Chokepoint 3.0, 4.0, and 5.0 onward to infinity.”

Paul Grewal’s opening statement focused on the FDIC, which allegedly pressured banks to “pause all crypto asset-related activity” in March 2022 and later required self-reporting of crypto services. Despite a January 2023 claim that banks weren’t restricted from serving crypto clients, an Inspector General’s report found the FDIC had failed to conduct promised risk assessments. “Eighteen months later, no such assessments have been publicly identified,” Grewal said.

Later in his testimony, Grewal detailed his firm’s attempts to get regulatory clarity from the SEC under the Biden admin, and described dozens of meetings between Coinbase and the SEC where they discussed regulation and shared ideas for regulatory clarity, to no avail. “We were simply invited to never come back,” he said.

Better Markets’ Shayna Olesiuk began her statement by arguing that crypto firms “put themselves in the crosshairs” by engaging in “widespread, flagrant illegal conduct” and ignoring financial protections. She linked bank failures — including Signature, Silvergate, and SVB — to “devastating” risks that threatened the financial system and imposed costs on taxpayers.

Citing the 2008 financial crisis, Olesiuk warned that crypto’s volatility and susceptibility to bank runs could spark a crisis “faster-moving and more devastating” than 2008. “Standing with crypto means standing with high-risk, if not illegal, activities,” she said.

“Despite full regulatory compliance, digital asset companies face forced account closures, denial of credit, and restricted payment services,” MARA’s Fred Thiel argued in his opening statement, calling the industry’s treatment unprecedented and discriminatory.

He warned that financial restrictions are pushing innovation offshore, undermining energy infrastructure, and allowing banks to decide which industries can exist. To counter this, Thiel urged Congress to enforce equal access to banking, increase regulatory transparency, and support digital asset businesses through clear policies. “Without immediate action, the U.S. risks losing its leadership in blockchain technology,” he said.

Operation Choke Point 2.0 Timeline

In February 2023, Nic Carter coined “Choke Point 2.0” in a Pirate Wires article called “Operation Choke Point 2.0 is Underway, and Crypto is in its Crosshairs.” In the piece, he showed how agencies like the Fed, FDIC, OCC, and DOJ issued guidance discouraging banks from working with crypto, isolating the sector from traditional finance. He likened the effort to the Obama-era “Operation Choke Point,” which targeted politically disfavored industries such as guns, and framed it as a covert Biden administration campaign to cripple crypto through private banking restrictions.

Six weeks after the Choke Point 2.0 article, a U.S. regional banking crisis led to the abrupt collapse of several banks, including crypto-friendly Signature under unclear circumstances. In a follow-up piece titled “Did the Government Start a Global Financial Crisis in an Attempt to Destroy Crypto?,” Nic argued the Biden administration exploited the crisis to eliminate crypto, arguing that the closure of Silvergate and Signature Bank were politically motivated takedowns.

In April 2023, House Republicans demanded answers from top regulators, while law firm Cooper & Kirk — which successfully challenged the Obama-era Chokepoint — argued the crackdown was unconstitutional. Senator Bill Hagerty condemned it as a Biden-led effort to strangle crypto by de-banking the industry.

Last July, then President-elect Donald Trump pledged to end OCP 2.0, fire SEC chief Gary Gensler, create a Presidential Crypto Advisory Council, and establish a strategic Bitcoin reserve.

And last September, Nic uncovered evidence that Biden administration regulators deliberately shut down Silvergate. In “Inside the Biden Admin’s Plot to Destroy Silvergate,” he detailed a covert 15% cap on crypto deposits, enforced through verbal mandates, and linked Senator Elizabeth Warren’s pressure on the FHLB to the bank’s collapse. Despite being solvent, Silvergate wasn’t failing — it was executed.

The Media and Choke Point 2.0

Previous to Marc Andreessen’s November appearance on Joe Rogan (my recap here), where he detailed the Biden admin’s efforts to debank crypto, few outside of the crypto media ecosystem acknowledged the issue; after the episode, some of the biggest mainstream outlets either denied Choke Point was a thing, said it was good if it was happening, or argued that Andreessen’s claims were exaggerated. Washingon Post’s coverage of Rogan episode was summed up well with its headline, which asked “Are banks really ‘de-banking’ customers?,” and subheadline, which answered, “Not in the way a certain venture capitalist says they do. But sometimes.”

Wrote the author: “Do banks really de-bank their customers? Sometimes — if customers are engaged in questionable or unusual behavior that’s not consistent with ‘safety and soundness.’ That’s always been the case.” A law professor is quoted as saying Choke Point 2.0 “is more myth than reality.”

The New York Times characterized the crypto sector as a “freewheeling industry that has been accused of scams and fraud” in the wake of the Andreessen interview, concluding (somewhat irrelevantly) that “[it’s] unclear if any [crypto] executives’ financial accounts were closed — and if they were, whether those actions happened because of legitimate regulatory concerns.”

Nic Carter responded to critics of Andreessen’s comments in December.

Crypto industry reactions

In addition to Nic, we spoke with several other industry veterans in advance of the hearing today. “The FDIC’s unlawful campaign against crypto is finally getting the attention it deserves in Congress,” Paul Grewal told us. “When you have everyone from Jamie Dimon to Donald Trump agreeing that debanking is a problem, you know it’s real. This isn’t about politics — it’s about making sure innovative American companies can access basic banking services. The tide is turning, and it’s about time.”

We also spoke to Founders Fund’s Joey Krug and Bridget Harris. “It's awesome that Congress is looking into and acknowledging that Choke Point 2.0 was both a real thing and a serious problem, and I'm thrilled that the new administration is taking steps to end it,” Joey said. “Almost everyone who's been in crypto a long time has at least one, if not multiple, stories of bank accounts being closed. The government shouldn't be forcing banks to discriminate against customers because of the industry they work in, their political views, or the financial assets they want to buy, it's un-American.”

Bridget added: “It’s a really positive sign that the government is hopefully rectifying their insane overreach into the banking sector via Choke Point 2.0 — this is a free country and customers (read: Americans) shouldn’t be unfairly punished for holding assets that they have an appetite / demand for.”

—Brandon Gorrell