OCC Finds Major Banks Restrict Crypto Firms in ‘Operation Choke Point 2.0’ Probe

The OCC’s review targeted the policies of nine major national banks: JPMorgan Chase Bank (JPM), Bank of America (BAC), Citibank (C), Wells Fargo Bank (WFC), U.S. Bank (USB), Capital One (COF), PNC Bank (PNC), TD Bank (TD), and BMO Bank (BMO). The agency found that at least some of these institutions applied special restrictions or heightened scrutiny to customers operating in specific, lawful sectors. Beyond digital assets, the targeted industries included oil and gas exploration, coal mining, firearms, private prisons, tobacco and e-cigarettes, and adult entertainment.

This practice of de-risking based on industry categorization, rather than an individual customer’s financial health or compliance record, forms the core of the OCC’s concern. The preliminary report indicates that these actions were not isolated incidents but reflected broader policies within these major financial institutions. By focusing on industry type, critics argue, banks effectively create financial redlining, cutting off legitimate businesses from essential banking services like payment processing, lending, and treasury management.

The findings have directly revived long-standing concerns in the financial and crypto sectors about a regulatory campaign reminiscent of “Operation Choke Point.” That 2013 Justice Department initiative pressured banks to sever ties with industries deemed high-risk, such as payday lenders and firearms dealers, under the guise of fraud prevention. Although officially terminated in 2017, its legacy has cast a long shadow.

Critics, particularly from the cryptocurrency industry, have argued that a similar dynamic—informally dubbed “Operation Choke Point 2.0″—has been at play in recent years. They allege that federal regulators, including the Federal Deposit Insurance Corporation (FDIC), have indirectly discouraged banks from servicing digital asset companies. This perception was fueled earlier this year by the release of internal FDIC documents that appeared to show significant skepticism toward crypto-related activities within the agency. The OCC’s report lends credence to these claims, suggesting that banks may be acting on perceived regulatory hostility rather than independent risk assessments.

In response to the findings, Comptroller of the Currency Jonathan V. Gould issued a strong statement framing the issue as a matter of financial fairness. “The findings reflect the agency’s commitment to ending efforts—whether instigated by regulators or banks—that would weaponize finance,” Gould said. He emphasized that the OCC plans to hold banks accountable as its inquiry continues, signaling potential enforcement actions against institutions found to have engaged in unlawful discrimination.

This investigation is only in its first phase. The OCC has clarified that thousands of customer complaints related to these practices remain under active review. The agency’s next steps will involve a deeper dive into specific cases to determine whether the banks’ actions constituted unlawful discrimination, a finding that could carry significant legal and reputational consequences for the institutions involved.

Ironically, this crackdown on discriminatory banking comes as the OCC itself has been relaxing its formal stance on cryptocurrency. Last month, the agency confirmed in an interpretive letter that national banks are permitted to hold cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) on their balance sheets to pay network fees for “otherwise permissible” banking activities. Just this week, it further clarified that banks can engage in “riskless principal transactions” with crypto assets. This regulatory evolution highlights a complex landscape where formal rules are becoming more accommodating, even as informal pressures and legacy risk-aversion may continue to restrict market access for crypto firms and other scrutinized industries.