OCC Report Finds Major US Banks Debanked Crypto Firms Based on Reputation Risk

Source: DefiPlanet Original Title: OCC Report Finds Major US Banks Debanked Crypto Firms Based on Reputation Risk Original Link: https://defi-planet.com/2025/12/occ-report-finds-major-us-banks-debanked-crypto-firms-based-on-reputation-risk/

Quick Breakdown

• The OCC released preliminary findings that nine major U.S. banks restricted financial services to specific lawful industries, including the crypto industry.
• The practice, known as “debanking,” involved refusing services or applying heightened scrutiny based on reputational risk rather than objective financial risk.
• Comptroller Jonathan Gould stated that the banks’ actions constitute an inappropriate use of their government-granted charters, and the OCC has committed to investigating.

OCC Debanking Investigation

The Office of the Comptroller of the Currency (OCC) has released a preliminary report indicating that the nine largest U.S. banks imposed restrictions on providing financial services to various lawful industries, notably including cryptocurrency firms. This practice, commonly referred to as “debanking,” occurred between 2020 and 2023, during which banks refused to offer services or subjected customers to scrutiny beyond their actual financial risks. The OCC’s findings suggest that banks often debanked industries based on broad classifications rather than an individualized, objective, risk-based analysis.

Comptroller of the Currency Jonathan Gould described the banks’ implementation of these policies as “unfortunate,” emphasizing that it was an inappropriate use of their government-granted charters and market power. The report found that industries facing the greatest difficulty in securing banking services included oil and gas, firearms companies, tobacco and e-cigarette manufacturers, and, critically, cryptocurrency companies. Many banks’ policies were publicly disclosed and tied to environmental, social, and governance (ESG) goals, with some institutions also heightening reviews in response to negative media coverage.

Regulator Responds to House Allegations and Unlawful Debanking

The OCC’s review was initially launched following an executive order to investigate banks for potentially barring customers based on political or religious beliefs, or for engaging in certain activities, such as cryptocurrency. Following the release of a House Financial Services Committee majority staff report alleging a “Chokepoint 2.0” campaign from 2021 to early 2025 to discourage banks from serving digital asset businesses, Comptroller Gould largely concurred with the central premise.

The House report contended that a series of interagency policy statements, supervisory programs, and accounting guidance created legal uncertainty and elevated “reputational risk” for banks that served digital asset firms. The cumulative effect of these actions reportedly resulted in at least 30 account closures and a chilling effect that drove innovation offshore, limiting U.S. consumer access to regulated payment rails. The OCC is now committed to investigating the role of the largest banks in debanking digital asset customers, with a stated intent to hold institutions accountable for any unlawful debanking.

Broader Regulatory Shift Against Reputation Risk

The OCC will remove references to “reputation risk” from its guidance and, with the FDIC, propose eliminating it from supervisory programs. The agency also pledged to ensure financial access is based on objective, risk-based analyses. This shift follows the OCC, FDIC, and Federal Reserve withdrawing previous “crypto risk” statements and issuing a new one in July that reframed risk management without blanket discouragement.

Meanwhile, industry leaders maintain a firm conviction that decentralized finance (DeFi) is on track for significant global adoption. Regulatory clarity, especially from the US government, is viewed as the vital catalyst for institutional investors to deploy significant capital into DeFi protocols. For this mainstream integration to occur, crucial advancements in automating compliance and enhancing infrastructure for efficient capital flows are essential.