Bitcoin Magazine

House Republicans Officially Confirm “Operation Choke Point 2.0” Targeted Bitcoin And Crypto Firms

Republicans on the House Financial Services Committee have released a 50-page report detailing what they describe as a systematic debanking effort by Biden-era regulators, dubbed “Operation Chokepoint 2.0.” 

While many of the findings — such as the Fed, FDIC, and OCC pressuring banks away from crypto through informal guidance, and the SEC’s “enforce first, make rules never” approach — were previously known, the report now places them squarely in the Congressional record.

The report identifies at least 30 entities that were effectively “debanked” through informal regulatory guidance and supervisory pressure. These businesses, the Committee claims, were forced out of the U.S. banking system without formal enforcement actions.

Government coercion, biased enforcement, and private pressure — all while denying

According to the document, the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) employed a range of tactics to influence bank behavior. 

These included “non-objection” letters, “pause” letters, and other forms of informal guidance designed to make banks hesitant to engage with crypto companies.

Meanwhile, the Securities and Exchange Commission (SEC) allegedly adopted a policy of “enforce first, make rules never,” using selective enforcement rather than clear regulatory frameworks to restrict digital-asset activity. 

The report highlights SAB 121, an SEC guidance that effectively blocked banks from offering custody services for crypto assets.

The report paints a picture of regulators publicly denying any bias against digital assets, while privately pressuring banks to sever ties with crypto firms. The report reads that while regulators consistently denied discouraging digital-asset activity, the evidence collected by the Committee shows a pattern of private pressure and informal coercion. 

Committee Republicans argue these actions represent a revival of Operation Choke Point, a controversial program from the early 2010s that used regulatory and reputational pressure to discourage banks from serving certain high-risk industries. 

The report asserts that the tactics used against crypto firms echo the same methods: informal guidance, opaque supervisory expectations, and reputational risk warnings.

“The lack of clear rules combined with aggressive enforcement has created a chilling effect on the digital-asset sector,” said a Committee spokesperson. “Legitimate American businesses were forced to move abroad or shut down, not because of wrongdoing, but because of regulatory overreach.”

Crypto firms struggled to keep bank accounts

The report includes anecdotal accounts of firms that struggled to maintain bank accounts despite following all applicable laws. One executive described repeated requests for documentation, sudden account closures, and vague warnings from compliance officers citing regulatory “uncertainty.” 

Another recounted being effectively cut off from the U.S. banking system after submitting a routine regulatory filing.

Republicans on the Committee argue that this environment has stifled innovation and driven financial activity offshore. They call on Congress and the Biden administration to reverse these policies, provide explicit guidance, and ensure that legitimate crypto firms can access banking services without fear of arbitrary pressure.

The Committee’s full report is available in full on the House Financial Services Committee website.

This post House Republicans Officially Confirm “Operation Choke Point 2.0” Targeted Bitcoin And Crypto Firms first appeared on Bitcoin Magazine and is written by Micah Zimmerman.

The Federal Communications Commission is set this week to vote on reversing cybersecurity rules for telecommunications providers that were put forward following the sweeping “Salt Typhoon” hacks.

The FCC’s meeting on Thursday includes plans to consider an order to rescind a ruling and proposed rules published in the waning days of the Biden administration. The January ruling requires telecom operators to secure their networks under Section 105 of the Communications Assistance for Law Enforcement Act.

But current FCC Chairman Brendan Carr argues that ruling “exceeded the agency’s authority and did not present an effective or agile response to the relevant cybersecurity threats.”

The proposed order would rescind the January ruling and withdraw proposed cybersecurity rules for telecom operators.

Instead, the FCC “should instead continue to pursue an agile and collaborative approach to cybersecurity through federal-private partnerships that protect and secure communications networks and more targeted, legally sound rulemaking and enforcement,” according to a factsheet on the order of reconsideration.

‘Worst’ hack ever

The Salt Typhoon campaign was revealed in 2024. It involved penetrating hacks into U.S. telecom networks and others across the globe. The hackers were reportedly able to target the communications of political figures and government officials, including then-candidate Donald Trump and running mate JD Vance.

U.S. officials have said Chinese-government sponsored hackers are behind the campaign. Senate Intelligence Committee Ranking Member Mark Warner (D-Va.) has described it as “the worst telecommunications hack in our nation’s history.”

The Cybersecurity and Infrastructure Security Agency has since said the Salt Typhoon campaign overlapped with global threat activities targeting multiple sectors, including telecommunications, government, transportation, lodging, and military infrastructure networks.

“While these actors focus on large backbone routers of major telecommunications providers, as well as provider edge (PE) and customer edge (CE) routers, they also leverage compromised devices and trusted connections to pivot into other networks,” CISA wrote in a September advisory. “These actors often modify routers to maintain persistent, long-term access to networks.”

In rolling out the January rules, Biden administration officials argued they represented a “critical step to require U.S. telecoms to improve cybersecurity to meet today’s nation state threats, including those from China’s well-resourced and sophisticated offensive cyber program.”

However, the FCC’s current leadership says the rules misinterpreted the law and “unnecessarily raised and purported to resolve issues that were not appropriate for consideration in the absence of public input.” The FCC’s factsheet also references the commission’s “recent engagement with providers and their agreement to take extensive steps to protect national security interests.”

In an October letter to the FCC, lawyers representing several telecom associations argued that the January ruling “would significantly undermine” public-private partnerships. They argued that telecom providers had voluntarily collaborated with federal agencies to investigate Salt Typhoon and adopted stronger cybersecurity measures.

Warner and Sen. Ron Wyden (D-Ore.) are also pressing the Department of Homeland Security to release an unclassified 2022 report on security vulnerabilities in the U.S. telecom sector. They argue that by not releasing the report, DHS is undermining public debate over how to best secure telecom networks in the wake of Salt Typhoon.

“The Salt Typhoon compromise represents one of the most serious espionage campaigns against the communications of U.S. government leaders in history, and highlighted important gaps in our nation’s communications security – in some cases, with providers ignoring basic security precautions such as credential re-use across network appliances and failure to adopt multi-factor authentication for highly privileged network administrator accounts,” Warner and Wyden wrote in a recent letter to DHS and the Office of the Director of National Intelligence.

Meanwhile, the House on Monday passed the “Strengthening Cyber Resilience Against State-Sponsored Threats Act.” The bill would establish a joint interagency task force to address China-linked cyber threats, including Salt Typhoon. The task force would be led by CISA, with involvement from the Justice Department, the FBI and several sector-risk management agencies.

The post FCC to vote on reversing cyber rules adopted after Salt Typhoon hack first appeared on Federal News Network.

© AP Photo/Andrew Harnik