U.S. watchdogs move to lower banking barriers for crypto firms

U.S. banking regulators are moving to curb a practice that had restricted banking access for lawful businesses, including crypto companies, based solely on vague reputational risk as bank supervisory standards tightened. Eleanor Terrett, host of Crypto In America, said the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation are advancing procedures to finalize rules defining the term "unsafe or unsound practices" in bank supervision. The term had operated for years without a clear definition and had served as a provision used to pressure crypto firms. Under the new rules, supervisory and enforcement actions would be limited to cases involving actual legal violations or material financial harm to a bank's capital, liquidity, asset quality, or similar conditions. That would make it harder to pressure banks into cutting off lawful clients, including crypto companies, without clear evidence of financial risk and based only on ambiguous reputational concerns. The move is being viewed as another major step toward reversing what has been called Operation Choke Point 2.0, a campaign to pressure the crypto industry by limiting access to banking services.