The US government deliberately tried to hold back crypto development for years, according to a report released by US Representative French Hill, who has been at the center of the congressional push to establish crypto policies.
The Republican chairman of the House Financial Services Committee issued a lengthy report on Monday detailing the federal government’s activities, which he claims represent a campaign to curb digital asset activity in the United States under the Biden administration. While the Senate is still trying to figure out the next big step in crypto legislation, Hill is looking to cement the narrative that an unfriendly US government was running what the industry and its Republican allies have called “Operation Choke Point 2.0.”
The original “Choke Point” was a government task force to warn banks about legitimate industries that regulators — including the Federal Deposit Insurance Corp. – considered particularly risky, such as payday lenders and ATMs. A backlash against the controversial policy prompted some Republican regulatory appointees, particularly focused on the firearms industry, to insist that banks be forced to deal with any legal business.
With this crypto-focused iteration, Hill’s report looked at the financial sector’s systemic “debanking” of digital asset companies and their executives. “The Biden administration sought to make it nearly impossible to engage in digital asset-related activities,” the report said. “To do so, it used a regulatory regime that provided too little certainty to financial institutions and too much discretion to the regulators who oversee them.”
None of the report’s conclusions come as a surprise to those who have followed US crypto surveillance in recent years. It highlights the Securities and Exchange Commission’s now-abandoned preference for shaping its digital asset policies with enforcement cases, and it reviews the restrictions that banking agencies like the Federal Reserve place on regulated banks that engage in digital asset activity.
The document argued that Biden-era regulators also failed to establish a clear regulatory regime for cryptocurrency, warning bankers that it “characterizes the digital asset ecosystem as an industry exposed to market volatility and risk.” asset, bitcoin rose from about $34,000 to about $94,000, but it had also fallen below $17,000 by the end of 2022. Some banks closely linked to the industry also failed in 2023.
This year, BTC reached an all-time high above $126,000 before falling rapidly in recent weeks to around $84,000 at the beginning of this week.
A major strength of the sector, however, is its relationship with President Donald Trump’s White House and with Congress. Earlier this year, lawmakers passed a bill to regulate US stablecoin issuers — the first major crypto legislation to become law. And the House of Representatives also approved a bill that would oversee the broader markets for digital assets, though the Senate is still working to catch up.
“Importantly, the Trump administration’s financial regulators have rescinded several Biden-era guidance, oversight and regulatory letters, interpretive letters and rules that promoted the debanking of the digital asset ecosystem by certain regulators,” the report noted.
