• The review covered nine largest national banks, including JPMorgan Chase and Bank of America.

• Banks applied heightened scrutiny to legal industries like digital assets, oil and gas, and firearms.

• At least 2,500 customer complaints are still under investigation by the OCC.

OCC report exposes U.S. banks denying crypto services due to industry bias, not risk. Discover implications for digital assets and banking accountability. Stay informed on regulatory shifts today.

What Does the OCC Preliminary Report Say About Banks Denying Services to Crypto Businesses?

The OCC preliminary report on banks denying services to crypto businesses highlights that nine major U.S. national banks restricted or denied services to customers in lawful industries, including digital assets, based solely on the nature of their business rather than assessed financial risks. This practice revives concerns over discriminatory banking policies similar to the defunct Operation Choke Point initiative. The Office of the Comptroller of the Currency (OCC) is committed to addressing these issues through ongoing investigations to ensure fair access to financial services.

How Have Banks Restricted Access for Crypto and Other Lawful Industries?

The OCC’s review examined policies at institutions such as JPMorgan Chase Bank, Bank of America, Citibank, Wells Fargo Bank, U.S. Bank, Capital One, PNC Bank, TD Bank, and BMO Bank. These banks imposed special restrictions or heightened scrutiny on customers involved in legal sectors like digital assets, oil and gas exploration, coal mining, firearms manufacturing, private prisons, tobacco and e-cigarettes, and adult entertainment. For instance, crypto firms faced de-banking not due to fraud or money laundering risks but because regulators and banks categorized the entire industry as inherently suspicious.

Internal documents from the Federal Deposit Insurance Corporation (FDIC), released earlier this year, showed agency skepticism toward cryptocurrency activities, which may have influenced banking decisions. Comptroller of the Currency Jonathan V. Gould stated, “The findings reflect the agency’s commitment to ending efforts—whether instigated by regulators or banks—that would weaponize finance.” This underscores the OCC’s push for accountability, with thousands of complaints still under review to determine if unlawful discrimination occurred.

Historically, the original Operation Choke Point, launched by the Justice Department in 2013 and ended in 2017, pressured banks to cut ties with certain lawful businesses deemed high-risk. Critics in the crypto community have labeled recent trends as “Operation Choke Point 2.0,” pointing to informal regulatory discouragement of crypto servicing. The OCC’s report validates these concerns by confirming that service denials were industry-driven, not risk-based, affecting an estimated number of businesses across multiple sectors.

In parallel, the OCC has shown a softening stance on cryptocurrencies. Last month, it issued an interpretive letter permitting major banks to hold crypto assets on balance sheets for paying blockchain network fees in permissible activities. More recently, the agency clarified that banks can engage in “riskless principal transactions” involving crypto, signaling a potential shift toward more inclusive policies.

Frequently Asked Questions

What Industries Were Targeted by Banks According to the OCC Report on Crypto Service Denials?

The OCC report identifies digital assets as a primary target, alongside oil and gas exploration, coal mining, firearms, private prisons, tobacco, e-cigarettes, and adult entertainment. These lawful businesses faced restrictions from major banks without evidence of elevated financial risks, prompting the OCC to investigate for potential discrimination.

Why Are Crypto Businesses Facing Banking Restrictions in the U.S.?

Crypto businesses in the U.S. often encounter banking restrictions due to perceived industry risks amplified by past initiatives like Operation Choke Point and recent regulatory skepticism. The OCC’s findings show that major banks, influenced by federal guidance, denied services based on business type alone, though the agency is now promoting fair access through its ongoing review.

Key Takeaways

• OCC’s Commitment to Fairness: The preliminary report emphasizes ending discriminatory practices by banks against lawful industries like crypto, with Comptroller Gould vowing accountability.
• Broader Industry Impact: Restrictions extend beyond crypto to sectors such as energy and manufacturing, affecting thousands of complaints under review.
• Regulatory Evolution: Recent OCC guidance allows banks to hold and transact in crypto for specific purposes, potentially easing future access for digital asset firms.

Conclusion

The OCC preliminary report on banks denying services to crypto businesses marks a critical examination of how major U.S. financial institutions have weaponized access based on industry prejudice rather than genuine risks. By highlighting patterns reminiscent of Operation Choke Point and scrutinizing policies at banks like JPMorgan Chase and Wells Fargo, the agency demonstrates its expertise in safeguarding equitable banking. As investigations continue into thousands of complaints, the evolving regulatory landscape, including permissions for crypto-related transactions, offers hope for improved inclusion. Businesses in digital assets and beyond should monitor these developments closely, preparing for a more transparent financial system that supports innovation without undue barriers.