When the annals of 21st-century finance are written, there will be a special chapter (messy, political, and deeply consequential) dedicated to the saga of “debanking.”
For much of the last three years, anyone working in crypto, from lean web3 startups to regulated banks and exchanges like Custodia Bank or Kraken, knew very well what it meant to be suddenly shut out of the U.S. financial system. Sometimes, silent signals or vague “high risk” assessments were enough. Other times, no explanation was given at all.
According to data released by AIMA in December 2024, fully 98% of crypto-focused hedge funds facing bank account termination were never given a clear justification.
Dubbed “Operation Choke Point 2.0,” this modern crackdown paralleled an earlier government push targeting politically disfavored industries. This time, thousands of crypto companies and their partners (including hedge funds and payments businesses) saw their bank accounts terminated. They found themselves stonewalled by risk officers or hamstrung by compliance teams afraid of regulatory backlash.
And just as the very word “debanked” became a kind of rallying cry, President Trump, whose own family suffered from financial weaponization to which one federal regulator has even officially admitted, took swift and dramatic action. On August 7, 2025, a major executive order declared that regulators could no longer pressure banks to cut ties with lawful businesses. It was a long-awaited intervention with implications still rippling through back offices and bank boardrooms.
But two months on, what progress has actually been made since that order? Have banks truly reopened their doors and reinstated the wrongly deplatformed? How are pioneers like Custodia Bank faring in this rebanked landscape?
The era of Operation Choke Point 2.0
The backstory to President Trump’s debanking EO is both long and contentious. During the Biden administration, a combination of public skepticism, regulatory overreach, and caution after crypto’s high-profile collapses (think FTX, Celsius, BlockFi) conspired to push much of the industry to the financial fringes. Firms were left scrambling for international alternatives or forced to operate in limbo.
House and Senate hearings in early 2025, spurred by investigative work from figures like Coin Metrics founder Nic Carter, laid bare a pattern: crypto companies (even those with pristine compliance reputations) faced sudden, coordinated exclusion from any U.S. bank. Examiners merely cited “high-risk” flags or referenced unpublished lists of industries to avoid.
Despite public denials, internal FDIC and OCC documents now indicate deliberate, sustained efforts to curtail crypto access to the banking system, validating what many had dismissed as an overblown “conspiracy theory.”
For those affected, the consequences were real. Caitlin Long, founder and CEO of Custodia Bank, described the result starkly:
“Operation Choke Point 2.0 has been devastating for the law-abiding U.S. crypto industry, and Custodia Bank has been hit hard despite our strong risk management and compliance track record.”
Business plans stalled. Payrolls froze. Layoffs ensued. Innovation retreated offshore or into shadow networks (something antithetical to America’s professed values of economic freedom and technological progress).
Guaranteeing fair banking for all Americans
Fast forward to August 7, 2025. With criticism mounting and advocacy reaching a fever pitch, President Trump signed the much-anticipated executive order titled “Guaranteeing Fair Banking for All Americans.”
The text does not name “crypto” specifically, but instead prohibits “politicized or unlawful debanking,” the act of refusing banking services to any lawful business, regardless of sector.
What makes this executive order different? In a savvy, if unconventional, move, Trump placed the Small Business Administration (SBA), historically a lender of last resort, above the Federal Reserve, OCC, and FDIC as an independent overseer on debanking issues. As Caitlin remarked:
“This is a HUGE tell–the White House doesn’t trust the 3 federal banking agencies (FDIC, Fed & OCC) to clean their own houses.”
The SBA’s new head, Kelly Loeffler, is a former Senator, ex-Bakkt CEO, and open Bitcoin advocate, signaling a clear intent to enforce this policy without the usual regulatory foot-dragging. 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
task (!!!).”
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 definitive end of Operation Choke Point 2.0. Yet, as executive orders often go, implementation on the ground is messier.
Banks navigating 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 access to banking and rein in runaway regulations and look forward to working with the White House, Congress and the agencies to create a national standard that advances these goals.”
But practical challenges remain. An internal bulletin from early October instructed banks to review the Trump order, reminding them of obligations under the Right to Financial Privacy Act and warning against arbitrary account closures. Yet, actual restoration of services to affected crypto firms has been slow.
Many banks, burned by past scandals, remain cautious, requiring firms to undergo extensive compliance audits or show years of spotless transaction records before reopening accounts. That’s hardly the clean break many hoped the executive order would provide. But it also reflects decades of ingrained regulatory caution.
Caitlin Long and Custodia Bank
No bank sits at the center of the debanking-to-rebanking transition quite like Custodia. Founded to bridge the gap between traditional banking and digital assets, Custodia was repeatedly debanked despite meeting compliance standards and earning high marks from state regulators.
In 2022, the bank sued the Federal Reserve after being denied a master account. Caitlin became a fixture on Capitol Hill, making the case for “special-purpose banks” serving the industry built for transparency and risk control.
Pointing to 2024 donation data, she criticized the Fed for its biased attitude towards firms 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, true “rebanking” is a work in progress. As Caitlin stated:
“A GOOD LITMUS TEST to measure the success of this EO is whether the 5 banks that debanked Custodia reinstate us. Federal bank regulators pressured multiple of them to debank us despite our clean compliance record–“because crypto.” If they reinstate us, then the EO succeeded.”
Rethinking access: from exclusion to innovation
If history is any guide, top-down regulatory fixes do not instantly reverse bottom-up risk culture. Yet there are signs of real change.
Small and medium-sized banks, regional players, and a handful of crypto-native BaaS (Banking-as-a-Service) providers are again courting digital asset customers. They’re offering 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 lawful business, regardless of political or technological stripe, can be denied service, economic freedom itself is at risk.
This connects the battle over crypto’s banking access to wider struggles facing cannabis, firearms, adult entertainment, and political advocacy groups. These are all groups that’ve been debanked in the past decade.
Looking forward: rebanked, but not relaxed
Where does the story go next? Trump’s executive order provides the sharpest legal tool yet for battered crypto companies to hold regulators and reluctant banks accountable. The appointment of an independent overseer outside the traditional banking agencies is a signal that change is not optional but mandated at the highest levels. To borrow from Caitlin:
“POTUS is serious.”
Yet, until all wrongfully debanked businesses have seen their accounts reinstated, the tension between financial freedom and risk aversion will define digital asset innovation.
For the first time in years, there’s a real, if fragile, hope that access to the banking system will be determined not by politics, but by the rule of law, innovation, and due process.
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