Crypto debanking is not over until Jan 2026: Caitlin Long
The ongoing struggles faced by the cryptocurrency sector in the United States illustrate a fractured relationship between the industry and traditional banking. Despite a wave of favorable legislation aimed at reviving cryptocurrency operations, regulatory experts and industry advocates caution that the specter of debanking still looms large.
The catalyst for this renewed scrutiny can be traced back to the collapse of crypto-friendly banks in early 2023, which ignited theories surrounding Operation Chokepoint 2.0—an alleged initiative described by critics as a governmental scheme to coerce banks into severing ties with cryptocurrency enterprises. Venture capitalist Nic Carter notably criticized this effort, arguing that it represented a blatant maneuver to pressure financial institutions away from the crypto sector.
Recent movements toward a more crypto-friendly regulatory landscape, spearheaded by U.S. President Donald Trump, who ordered the establishment of a national reserve using Bitcoin (BTC) seized in criminal cases, have been overshadowed by apprehensions among industry insiders. Caitlin Long, founder and CEO of Custodia Bank, articulated this sentiment during a March 21 segment of Cointelegraph’s Chainreaction, where she asserted, "It’s premature to say that debanking is over."
Long elaborated on the current state of affairs, revealing that two crypto-friendly banks are presently under investigation by the Federal Reserve, describing a significant presence of examiners scrutinizing their operations. This ongoing examination highlights the precarious position that crypto institutions find themselves in amidst a fluctuating regulatory environment.
Compounding the challenges, Long noted the partisan influences surrounding the Federal Reserve, suggesting that the ongoing leadership controlled by Democrats complicates potential reform initiatives. Despite the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) moving to revoke anti-crypto directives, the Fed’s position remains uncertain, leading Long to speculate on the potential ramifications of an incongruent regulatory landscape.
The impact of these debanking efforts on firms like Custodia Bank has been profound, costing them not just time but substantial financial resources as they navigate an environment rife with operational challenges. A similar sentiment was expressed across the Atlantic by Anastasija Plotnikova, co-founder and CEO of the blockchain regulatory firm Fideum, highlighting that European firms also face significant barriers due to banking restrictions imposed on cryptocurrency businesses.
Plotnikova recalled her personal experiences with account closures over the years, reaffirming the notion that debanking has remained a persistent headache within the industry. Her insights reflect a broader trend, underscoring an international struggle where both small and large crypto firms are plagued by similar operational issues—questions of financial stability, access to services, and regulatory compliance are just some of the shared adversities.
Trump’s recent commitment to curtail the repression imposed by Operation Chokepoint 2.0 comes amidst reports that at least 30 technology and crypto founders faced clandestine banking obstructions during this period, further emphasizing regulatory overreach.
While there have been notable victories in legislative progress, the inertia surrounding debanking signifies an operational crisis that both U.S. and European cryptocurrency firms continue to grapple with, prompting many within the community to call for a more coherent and supportive regulatory framework that promotes innovation without undue interference.
As industry leaders and regulatory bodies look forward to a possible resolution, the struggle for banking access remains a key battlefield in the ongoing evolution of the cryptocurrency sector.
