Coinbase CLO to Address ‘Operation Chokepoint 2.0’ in Congressional Hearing

Coinbase’s Chief Legal Officer, Paul Grewal, will testify before the U.S. Congress this week as lawmakers investigate allegations that federal regulators deliberately pressured banks to cut off financial services to crypto companies. 

“I’m testifying at the @FinancialCmte’s oversight hearing looking into the past clandestine and undemocratic campaign to cut off crypto from banking,” Grewal said in a post on X. “On behalf of Coinbase, I’m proud to help shed light on the unfair treatment of our industry.”

The “Operation Choke Point 2.0: The Biden Administration’s Efforts to Put Crypto in the Crosshairs” hearing comes amid industry clamoring that U.S. financial regulators, including the Federal Deposit Insurance Corporation (FDIC), engaged in an unofficial campaign—to limit crypto’s access to banking. 

With the U.S.’s stance on digital assets shifting under President Donald Trump’s administration, the outcome of these hearings could shape the future of crypto’s role in the U.S. financial system.

Grewal will testify alongside MARA Holdings CEO Fred Thiel, WSPN CEO Austin Campbell, and Anchorage Digital CEO Nathan McCauley in front of the Subcommittee on Oversight and Investigations of the Committee on Financial Services.

Lawmakers will also hear from financial and legal experts, including Stephen Gannon of Davis Wright Tremaine LLP and Mike Ring of Old Glory Bank. More witnesses may still be added to the list.

The issue gained renewed attention in November when venture capitalist Marc Andreessen claimed on Joe Rogan’s podcast that over 30 tech founders, many in crypto, had their bank accounts suddenly closed during former President Joe Biden’s presidency.

Then last month, House Oversight Committee Chair Rep. James Comer (R-KY) launched a formal investigation into the alleged financial blacklisting of crypto companies under the Biden administration, amid the rising tension between crypto companies and regulators.

“The Committee… is investigating improper debanking of individuals and entities based on political viewpoints or involvement in certain industries such as cryptocurrency and blockchain,” Comer wrote in the letter sent to crypto leaders.

Unredacted documents obtained by Coinbase suggest that the FDIC directed banks to limit their exposure to digital asset firms, raising concerns about potential regulatory overreach.

Crypto leaders argue this was a government-led effort to stifle the industry, similar to the original “Operation Chokepoint” under the Obama administration, which targeted industries deemed high-risk, such as gun sellers and payday lenders.

The previous Biden administration has denied any coordinated effort to block crypto firms from banking access. 

While regulatory officials, such as former SEC Chair Gary Gensler, have denied the existence of an orchestrated effort, the evidence suggests otherwise.

The official hearing, scheduled for February 6, will be conducted separately by both the Senate Banking Committee and the House Financial Services Committee.

The FDIC did not immediately respond to Decrypt’s request for comment.

Edited by Sebastian Sinclair