When the annals of 21st century finance are written, a special chapter (sloppy, political and consequential) will be devoted to the saga of ‘debanking’.
For much of the past three years, everyone working in crypto, from lean web3 startups to regulated banks and exchanges like Custodia Bank or Kraken, knew full well what it meant to suddenly be locked out of the US financial system. Sometimes silent signals or vague ‘high risk’ assessments were sufficient. Other times no explanation was given at all.
According to data released by AIMA in December 2024, 98% of crypto-focused hedge funds that faced bank account terminations never received clear justification.
This modern crackdown, dubbed “Operation Choke Point 2.0,” paralleled an earlier government push on politically disadvantaged industries. This time, thousands of crypto companies and their partners (including hedge funds and payment companies) saw their bank accounts terminated. They were stymied by risk officials or hamstrung by compliance teams fearful of regulatory backlash
And just as the word “debanked” became something of a rallying cry, President Trump, whose own family suffered from financial weaponization that a federal regulator has even officially admitted to, took swift and dramatic action. On August 7, 2025, a major executive order stated that regulators could no longer pressure banks to cut ties with legitimate businesses. It was a long-awaited intervention, the consequences of which are still being felt in the back offices and boardrooms of banks
But two months later, what progress has actually been made since that order? Have banks really reopened their doors and reinstated the wrongfully deplatformed banks? How are pioneers like Custodia Bank faring in this reinvested landscape?
The era of Operation Choke Point 2.0
The backstory of President Trump’s debanking EO is both long and controversial. During the Biden administration, a combination of public skepticism, overreaching regulation, and caution following the high-profile collapse of crypto (think FTX, Celsius, BlockFi) pushed much of the industry to the financial margins. Companies had to look for international alternatives or were forced to operate in limbo
House and Senate hearings in early 2025, spurred by investigative work from figures like Coin Metrics founder Nic Carter, exposed a pattern: crypto companies (even those with impeccable compliance records) faced sudden, coordinated foreclosure from any U.S. bank. Examiners merely cited “risky” flags or referred to unpublished lists of industries to avoid.
Despite public denials, internal FDIC and OCC documents now indicate deliberate, ongoing efforts to restrict crypto access to the banking system, confirming what many had dismissed as an exaggerated “conspiracy theory.”
The consequences were real for those affected. Caitlin Long, founder and CEO of Custodia Bank, described the outcome starkly:
“Operation Choke Point 2.0 has been devastating to the law-abiding U.S. crypto industry, and Custodia Bank has been hit hard despite our strong track record in risk management and compliance.”
Business plans stalled. Payrolls are frozen. Layoffs followed. Innovation retreated to sea or into shadow networks (something that conflicted with America’s professed values of economic freedom and technological progress).
Ensure fair banking for all Americans
Fast forward to August 7, 2025. As criticism mounted and advocacy reached a fever pitch, President Trump signed the long-awaited executive order entitled “Guaranteeing Fair Banking for All Americans.”
The text does not specifically mention “crypto,” but instead prohibits “politicized or unlawful debanking,” the act of denying banking services to any legitimate business, regardless of sector.
What makes this executive order different? In a smart, if unconventional, move, Trump has placed the Small Business Administration (SBA), historically a lender of last resort, above the Federal Reserve, OCC and FDIC as the independent regulator of debanking issues. As Caitlin noted:
“This is a HUGE statement: the White House does not trust the three federal banking agencies (FDIC, Fed & OCC) to clean their own houses.”
The new head of the SBA, Kelly Loeffler, is a former senator, former CEO of Bakkt, and open advocate of Bitcoin, signaling a clear intention to enforce this policy without the usual regulatory hassle. As Caitlin assessed:
“It’s not just anyone in charge at the SBA – it’s Kelly Loeffler. She’s a bitcoiner. Yes, the White House just gave a *bitcoiner* this job (!!!).”
Caitlin pointed out that banks that refused to serve legitimate crypto companies or closed accounts were now “on the hook” and would be held accountable.
Much of the crypto community interpreted the order as the final end of Operation Choke Point 2.0. But as often happens, the implementation on the ground is messier
Banks navigate a new mandate
Major banks, lobbyists and compliance teams spent the late summer in a frenzy. Industry groups such as the Bank Policy Institute praised the administration:
“We thank the Administration for its efforts to protect banking access and rein in runaway regulation, and look forward to working with the White House, Congress and agencies to create a national standard that advances these goals.”
But practical challenges remain. An internal bulletin in early October ordered banks to review Trump’s order, reminded them of obligations under the Right to Financial Privacy Act and warned against arbitrary account closures. However, the actual restoration of services to the affected crypto companies has been slow.
Many banks, burned by past scandals, remain cautious, requiring companies to undergo extensive compliance audits or provide years of spotless transaction records before reopening their accounts. That’s hardly the clean break many hoped the executive order would provide. But it also reflects decades of deep-seated regulatory caution
Caitlin Long and Custodia Bank
No bank is as central to the transition from debanking to rebanking as Custodia. Created to bridge the gap between traditional banking and digital assets, Custodia was repeatedly debanked despite meeting compliance standards and receiving high marks from government regulators.
In 2022, the bank sued the Federal Reserve after it was denied a master account. Caitlin became a fixture on Capitol Hill, advocating for special-purpose banks serving an industry built on transparency and risk management.
Referring to 2024 donation data, she criticized the Fed for its biased attitude toward companies working with crypto, revealing that 92% of contributions from these agencies’ employees in 2024 went to Democratic Party candidates. Caitlin believes this may have influenced debanking decisions under Biden.
While the new executive order theoretically clears the playing field for Custodia, the real rebanking is a work in progress. As Caitlin said:
“A GOOD LITMUS TEST to measure the success of this EO is whether the five banks that debanked Custodia will hire us back. Federal bank regulators have pressured several of them to debank us despite our good compliance record – “because crypto.” If they hire us back, the EO has succeeded.”
Rethinking access: from exclusion to innovation
If history is any guide, top-down regulatory solutions cannot immediately reverse the risk culture from the bottom up. Yet there are signs of real change.
Small and mid-sized banks, regional players and a handful of crypto-native BaaS (Banking-as-a-Service) providers are once again courting digital asset customers. They offer compliance onboarding, transaction monitoring and open-door policies that would have been unthinkable even six months earlier.
Meanwhile, the conversation is shifting from mere “access” to a deeper redefinition of financial rights. If a legitimate business, regardless of political or technological background, can be denied services, economic freedom itself is at risk.
This connects the battle for access to crypto banks to the broader struggles facing cannabis, firearms, adult entertainment and political advocacy groups. These are all groups that have been closed down in the past ten years
Looking ahead: banked again, but not relaxed
Where does the story continue? Trump’s executive order provides the strongest legal tool yet for battered crypto companies to hold regulators and reluctant banks accountable. The appointment of an independent regulator outside the traditional banking agencies is a signal that change is not optional, but mandatory at the highest levels. To borrow from Caitlin:
“POTUS is serious.”
But until all wrongly debanked companies recover their accounts, the tension between financial freedom and risk aversion will define digital asset innovation.
For the first time in years, there is a real, albeit fragile, hope that access to the banking system will not be determined by politics, but by the rule of law, innovation and due process.