GOP Report Accuses Biden of ‘Operation Choke Point 2.0’ Against Crypto

Republican leaders on the US House Financial Services Committee and House Oversight Subcommittee have released a final staff report making explosive claims about the treatment of the cryptocurrency industry under the previous administration. The report, spearheaded by House Financial Services Chair French Hill and Oversight Subcommittee Chair Dan Meuser, alleges that federal regulators under former President Joe Biden systematically pressured banks to sever ties with digital asset companies and individuals. This alleged campaign, which the lawmakers have branded “Operation Choke Point 2.0,” is described as a deliberate effort to exclude the crypto sector from the traditional financial system.

The report contends that this debanking was not achieved through clear, formal rules but through regulatory intimidation. According to the Republican lawmakers, agencies used “vague rules, excessive discretion, informal guidance, and aggressive enforcement actions” to coerce financial institutions into dropping digital asset clients. This method, they argue, created a climate of fear where banks chose to preemptively cut off services to avoid regulatory scrutiny, effectively choking the industry’s access to essential banking infrastructure like payment processing and custodial services.

In response to these findings, the report concludes that congressional intervention is imperative. The central recommendation is for Congress to “enact digital asset market structure legislation” to establish a transparent and predictable regulatory framework. This call to action is a direct challenge to the current state of affairs, where the industry operates under a patchwork of guidance from multiple agencies, including the Securities and Exchange Commission and the Commodity Futures Trading Commission.

The proposed solution is specifically named: the CLARITY Act. This legislation is positioned as the necessary corrective to the alleged regulatory overreach of the Biden era. By creating formal, well-defined rules of the road, the Act aims to prevent regulators from using informal pressure and discretionary enforcement to marginalize the digital assets sector. The report frames this not just as a business issue, but as a matter of financial inclusion and innovation, arguing that without legislative guardrails, regulators can arbitrarily decide which legal industries have access to banking.

The choice of the term “Operation Choke Point 2.0” is politically charged and deliberate. It references a controversial initiative from the Obama administration, where the Department of Justice was accused of pressuring banks to drop clients in industries deemed high-risk, such as payday lenders and firearm dealers. By invoking this legacy, the Republican lawmakers are framing the current situation with cryptocurrency as a partisan regulatory abuse of power, suggesting a continuation of tactics to suppress disfavored sectors through the banking system rather than through open legislative debate.

This report from the House Financial Services and Oversight committees is more than an industry analysis; it is a political document that sets the stage for future legislative battles. It clearly delineates a Republican position that views the previous administration’s approach as hostile to digital asset innovation and in need of congressional correction. The demand for the CLARITY Act and other targeted bills underscores the deepening partisan divide over how to regulate the burgeoning cryptocurrency industry, with one side alleging regulatory sabotage and the other likely to defend its actions as necessary consumer protection.