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Coinbase has officially contested what it refers to as a “political” banking regulation that it claims was utilized to coerce banks into severing connections with cryptocurrency companies, contributing to the escalating U.S. discussion regarding debanking and regulatory excess.
In a public announcement and a comprehensive commentary letter submitted to federal authorities, the exchange accused banking regulators of misapplying the notion of “reputational risk” to discreetly limit lawful crypto operations during the Biden administration.
Coinbase Backs OCC, FDIC Initiative to Eliminate Reputational Risk Standard
Faryar Shirzad, Coinbase’s chief policy officer, stated that the organization endorses a collaborative proposal by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation to remove reputational risk from their supervisory frameworks.
@USOCC reveals nine major banks, including @jpmorgan “debanked” crypto and other lawful industries with inappropriate restrictions #CryptoNews #Bankinghttps://t.co/hZYJOCY88v
— Cryptonews.com (@cryptonews) December 11, 2025
Shirzad indicated that examiners at both agencies utilized the concept as a “supervisory hammer” to pressure banks into discontinuing services to crypto clients, a practice referred to in the industry as Operation Chokepoint 2.0.
In its correspondence to the OCC and FDIC, Coinbase characterized reputational risk as ambiguous, subjective, and disconnected from quantifiable financial harm or legal breaches.
The firm contended that bank oversight should solely concentrate on tangible risks associated with safety, soundness, and legal compliance, cautioning that unmeasurable concerns regarding public perception open the door to political bias.
Coinbase asserted that reputational risk was employed to dissuade banks from offering essential services to cryptocurrency companies even when their operations were lawful.
The exchange claimed to have encountered these pressures firsthand. Through Freedom of Information Act requests and subsequent legal action, Coinbase revealed internal regulatory communications that it alleges demonstrate that crypto firms were targeted behind the scenes.
The organization stated that such actions jeopardized its operations and disrupted banking access for its employees, reflecting what it described as a broader trend of covert supervision that shielded regulators from public accountability.
Coinbase is calling on regulators to advance beyond the current proposal by entirely prohibiting any application of reputational risk or similar concepts in bank supervision.
It cautioned that partial restrictions would permit the practice to resurface under a different guise, allowing banks to cite public or political perception alongside other risks when denying services.
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The company also advocated for more explicit rules linking adverse supervisory actions to specific elements such as credit, liquidity, operational, or compliance risk.
U.S. Regulators Investigate Bank Restrictions on Cryptocurrency Firms
The conflict is situated at the heart of a broader political struggle concerning crypto debanking in the United States.
Crypto executives and Republican lawmakers have long contended that regulators employed informal guidance, increased scrutiny, and off-the-record warnings to steer banks away from clients involved with digital assets without imposing formal bans.
Regulators have consistently denied orchestrating such an initiative, asserting that banks made independent choices based on anti-money-laundering responsibilities and safety concerns.
The issue gained renewed attention in December when JPMorgan Chase CEO Jamie Dimon dismissed claims that his bank participates in politically motivated debanking.
@USOCC reveals nine major banks, including @jpmorgan “debanked” crypto and other lawful industries with inappropriate restrictions #CryptoNews #Bankinghttps://t.co/hZYJOCY88v
— Cryptonews.com (@cryptonews) December 11, 2025
His remarks followed public accusations from figures in the crypto space, including Strike CEO Jack Mallers, who stated that his accounts were closed without a clear rationale.
Dimon asserted that JPMorgan operates solely within legal and regulatory frameworks, not based on ideology, a position echoed by other major banks facing similar allegations.
Regulators are currently conducting their investigations, as the OCC released preliminary findings in December indicating that all nine of the largest U.S. national banks imposed inappropriate restrictions on lawful businesses from 2020 to 2023, including those in the digital asset sector.
@USOCC reveals nine major banks, including @jpmorgan “debanked” crypto and other lawful industries with inappropriate restrictions #CryptoNews #Bankinghttps://t.co/hZYJOCY88v
— Cryptonews.com (@cryptonews) December 11, 2025
Comptroller of the Currency Jonathan Gould stated that these practices were widespread and constituted an improper utilization of national bank charters.
The review was mandated under President Donald Trump’s August executive order directing agencies to ensure equitable access to banking services.
The post Coinbase Slams ‘Political’ Banking Rule Used to Pressure Crypto Firms appeared first on Cryptonews.
