The Office of the Comptroller of the Currency (OCC) released an investigative report yesterday (December 11th) revealing that from 2020 to 2023, nine major U.S. banks suspended or restricted financial services to several politically controversial industries, including the cryptocurrency industry. The OCC stated that some banks continued to differentiate between legitimate and compliant industries, requiring additional scrutiny or directly restricting transactions, constituting unreasonable discrimination. The OCC will pursue accountability for these actions and ensure that illegal account suspensions do not continue.
Banks raise service thresholds for specific industries; OCC accuses them of unreasonable discrimination.
The OCC pointed out that between 2020 and 2023, several major U.S. banks raised the bar for opening accounts and providing financial services, or even refused to do business with customers, citing their involvement in "politically controversial legitimate businesses."
The OCC determined that these practices were not only unreasonable but also constituted discriminatory treatment, because banks' responsibility should be based on risk, not on the political sensitivities of the industry itself. This investigation was launched because in August of this year, US President Trump signed an executive order requiring an examination of whether banks had suspended accounts due to customers' political, religious, or other non-risk factors. The OCC's investigation was conducted under this executive order.
The crypto industry has also been significantly affected, along with several other controversial sectors.
The OCC further clarified that the cryptocurrency industry is not the only sector included in the list of industries restricted by banks. The report indicates that oil and gas exploration, coal mining, firearms-related industries, private prisons, tobacco and e-cigarette manufacturers, and adult entertainment businesses are all on the restricted list.
Regarding the crypto industry, the OCC stated that banks not only restrict cryptocurrency issuers but also apply the same approach to exchanges and regulators. Banks typically cite "prevention of financial crime" or "compliance risk review" as reasons, thus raising the bar for these businesses to obtain financial services.
OCC Administrator Jonathan Gould expressed regret, believing that it was inappropriate for the largest bank in the United States to use its license and market power to push through these account suspension policies.
The nine major banks are the subjects of the investigation, and legal action will continue.
In this survey, the OCC examined nine of the largest commercial banks in the United States:
JPMorgan Chase
Bank of America
Citibank
Wells Fargo
U.S. Bank
Capital One
PNC Bank
TD Bank
BMO Bank
These banks are among the most influential institutions in the U.S. financial system, hence the high level of attention the investigation has received. The OCC stated that the investigation is not yet complete and they are continuing to gather more evidence and pursue legal action.
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The OCC report still has gaps and does not address other sources of regulatory pressure.
Nick Anthony, a policy analyst at the Cato Institute, one of the top five think tanks in the United States, said the report still has much to add. He pointed out that while the report criticizes banks for cutting off controversial clients, it fails to mention that regulators themselves require banks to assess "reputational risk," which may be one reason why banks take such actions.
He also mentioned that the report alleges banks restrict crypto services but fails to mention that the Federal Deposit Insurance Corporation (FDIC) had explicitly warned banks to avoid cooperating with crypto businesses. Furthermore, French Hill, the Republican chairman of the House Financial Services Committee, previously pointed out that the FDIC's "suspension letters" sent during the Biden administration further distanced banks from crypto businesses, reinforcing the so-called "crypto account suspension."
The real source of pressure is the FDIC and the Federal Reserve, not the OCC.
Caitlin Long, founder of the crypto-friendly bank Custodia Bank, also commented on the report. She believes that the entities that most severely shut down crypto accounts during the Biden administration were not the OCC, but rather the FDIC and the Federal Reserve (Fed).
She stated that the OCC report only targets large banks, but in the past, the greatest pressure on the crypto industry came from the FDIC and the Federal Reserve's covert pressure on small and medium-sized banks, causing these banks to distance themselves from crypto-related businesses.
Image source: X/@CaitlinLong_
This article is reprinted with permission from (ChainNews).
Original title: (US OCC: Nine major banks including JPMorgan Chase and Citigroup have suppressed the crypto industry; legal action will continue)
Original author: Louis Lin
The article, "Evidence Revealed of Nine Major US Banks Suppressing the Crypto Industry! OCC: We Will Continue to Pursue Legal Action," was originally published on CryptoCity.
