The U.S. banking regulator has unveiled the financial restrictions imposed on the crypto sector between 2020 and 2023.
The nine largest U.S. banks implemented restrictive policies toward sectors considered politically controversial, including cryptocurrencies, according to preliminary findings from the Office of the Comptroller of the Currency (OCC).
According to the initial conclusions published by the OCC on December 10, the major banks “made inappropriate distinctions among customers in the provision of financial services on the basis of their lawful business activities” during the period from 2020 to 2023.
Banks established internal rules that either limited access to banking services or required more complex verification and approval procedures before providing financial assistance to certain categories of clients, the OCC explained.
The investigation also found that, in addition to the digital asset sector, other industries faced service restrictions, including oil and gas exploration, coal mining, firearms manufacturing, private prisons, tobacco and e-cigarette producers, and adult entertainment.
Specifically for the crypto world, banking restrictions affected “issuers, exchanges, and custodians, often justified by concerns over financial crime,” the OCC noted.
Jonathan Gould, Comptroller of the Currency, stated:
“It is unfortunate that the nation’s largest banks thought these harmful debanking policies were an appropriate use of their government-granted charter and market power.”
He added:
“While many of these policies were undertaken in plain sight and even announced publicly, certain banks have continued to insist that they did not engage in debanking.”
Banks under review
The OCC’s investigation covered JPMorgan Chase, Bank of America, Citibank, Wells Fargo, US Bank, Capital One, PNC Bank, TD Bank, and BMO Bank, the main national banks under its jurisdiction.
The review was initiated following an executive order signed by President Donald Trump in August, which required a check on whether banks engaged in debanking or discriminated against individuals based on their political or religious beliefs.
The OCC stated that the investigation is ongoing and that results may be referred to the Department of Justice.
Criticism of the report
Nick Anthony, political analyst at the libertarian-leaning Cato Institute, commented to Cointelegraph that the OCC report “leaves much to be desired” and didn’t mention “the most well-known causes of debanking.”
He added:
“The report criticizes banks for severing ties with controversial clients, but it fails to mention that regulators explicitly assess banks on their reputation. Making matters worse, the report appears to blame banks for cutting ties with cryptocurrency companies, yet makes no mention of the fact that the [Federal Deposit Insurance Corporation] explicitly told banks to stay away from these companies.”
Caitlin Long, founder and CEO of Custodia Bank, a crypto-focused bank, emphasized that the “worst culprits” of crypto-related debanking under the Biden administration were the FDIC and Federal Reserve, not OCC.
“In OCC’s defense, this report covers large banks only. Crushing crypto wasn’t a supervisory priority for large banks like it was for small [and] mid-sized banks,” she added.
