Hey all, Jason here.
As I told the guys from Current during our recent interview about their $80m Series E, I’m not much of a sports watcher. But I made an exception for Mexico’s World Cup match against South Africa, which Mexico won 2-0. I would say I’d watch the Netherlands play Japan tonight, but the game starts at 10:00pm here, and there’s no guarantee I’ll be able to stay awake for it.
Another highly anticipated event unfolded last week: SpaceX’s IPO. The rocket launch-satellite internet-AI-social media company ended its first day trading up nearly 20% on strong retail interest. I’ll be curious to see if Elon true believers can help the company’s valuation defy gravity, or if it will come down as lockups expire and early investors and employees cash out.
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DOJ “Debanking” Subpoenas Are Small Piece of Bigger Puzzle
The U.S. Attorney’s Office in Washington, D.C., helmed by one-time CW and Fox News personality Jeanine Pirro, has sent subpoenas to JPMorgan Chase, Bank of America, and other banks seeking information on whether they “debanked” customers, the Wall Street Journal reported last week.
“Debanking” does not have a precise definition, but, in this context, Pirro and the Trump administration are using the term to refer to banks ending business relationships with customers, including Trump, for what they say are politically or ideologically motivated reasons.
The push from the Department of Justice is part of a broader campaign by the Trump administration and its allies to reshape the banking system — one, in many cases, they feel has treated them unfairly — according to their ideological beliefs and in support of their business interests.
The “Operation Choke Point 2.0” narrative — or conspiracy theory, depending on where you sit — somewhat overlaps with the administration and its allies’ debanking complaints.
While those alleging they were unfairly debanked typically focus on political and ideological beliefs and legal-but-disfavored industries, like firearms or adult services, the narrative around Operation Choke Point 2.0 focuses squarely on crypto.
Operation Choke Point 2.0, many in the crypto industry argue, was a shadowy and concerted effort by law enforcement and banking regulators under the Biden administration to deny crypto companies and individuals who were involved in crypto access to the U.S. banking system.
CryptoLaw, a site founded by the Deaton Law Firm, describes Operation Choke Point 2.0 as “a clear case of federal agencies using their power against politically disfavored industries. In this case, the government explicitly targeted the digital asset class because it challenges and disrupts traditional banking frameworks in a thoroughly legal manner. Restrictions like those engineered by the government in Operation Choke Point and Operation Choke Point 2.0 challenge the legal rights of companies and individuals to financial access, investor choice, and economic innovation.”
CryptoLaw further makes the narrative link between debanking and Operation Choke Point 2.0 explicit, alleging that “Operation Choke Point 2.0 represents a concerted effort by the U.S. federal government to stifle the crypto industry and de-bank crypto holders.”
The backdrop often elided by those advancing the Operation Choke Point 2.0 narrative is the collapse of major players in the crypto space in 2022, which conventional thinking says, laid the groundwork for the voluntary liquidation of crypto-focused Silvergate.
Amid the backdrop of the 2022 “crypto winter,” which saw numerous crypto firms collapse or be exposed as Ponzi schemes (Celsius) or frauds (FTX), Silvergate’s liquidation, and the subsequent failures of SVB, Signature, and First Republic, it is reasonable to argue that the traditional banking industry had ample and legitimate reasons to avoid working with crypto firms.
Some in industry, including a former Silvergate executive, have challenged the narrative around Silvergate’s liquidation, arguing that the bank had withstood an unprecedented drawdown of its deposit base, successfully fulfilling withdrawal requests and maintaining solvency. In this alternate telling, it was government regulators stepping in and effectively forcing the bank to wind down that led to its ‘voluntary’ liquidation.
Leveraging the debanking an Operation Choke Point 2.0 narratives aren’t the only ways the Trump administration and its coalition are seeking to exert pressure to reshape the U.S. bank system.
Three recent Trump Executive Orders add further context.
A 2025 E.O. on “Guaranteeing Fair Banking for All Americans” directed federal banking agencies to eliminate the use of “reputation risk or equivalent concepts” from all guidance documents, manuals, and supervisory materials within six months.
Over the course of 2025 and 2026, the FDIC, OCC, and Federal Reserve have revised guidelines and undertaken rulemaking to codify the elimination of reputation risk as part of their supervisory processes.
As covered last month, the Executive Order on “Restoring Integrity to America’s Financial System,” targets undocumented immigrants use of and access to the U.S. banking system, though it falls short of earlier rumors of an E.O. that would attempt to require financial institutions to collect citizenship information as part of their account opening processes.
Functionally, the E.O. seeks to discourage financial institutions from allowing undocumented immigrants to open bank accounts or access credit, despite no statutory or regulatory prohibition on doing so.
And the E.O. on “Integrating Financial Technology Innovation Into Regulatory Frameworks,” seeks to promote innovation — including specifically in digital assets — by calling on regulators, including the Federal Reserve, to facilitate integrating “digital assets and innovative technology into traditional financial services and payment systems.”
The E.O. “requests” the Federal Reserve to evaluate “the legal, regulatory, and policy framework governing access to Reserve Bank payment accounts and payment services by uninsured depository institutions and non-bank financial companies, including those engaged in digital assets and other novel financial activities.”
The debanking and Choke Point narratives, the E.O.s, and the rollback of reputational risk as a regulatory criterion must be viewed in the wider context. In a historically unproductive Congress, lawmakers have spent countless hours wrangling over legislation to legitimate and regulate stablecoins — the GENIUS Act, which has become law — and wider crypto market structure legislation — the CLARITY Act, which faces an uncertain future in the Senate.
Perhaps it should be unsurprising this is where Congress chose to spend its time, given that the crypto industry was the largest single-issue corporate donor in the 2024 election cycle. Pro-crypto groups spent more than $200 million across campaign contributions, PACs, lobbying, and dark money spending.
And Trump, his family, and other key personnel in his administration have extensive ties to and directly benefit from the further legitimization of crypto and its increasingly intertwined relationship with the traditional financial system. A sample of the administration’s conflicts of interest include:
The $TRUMP and $MELANIA “memecoins” the President and First Lady launched shortly before the 2024 election, both of which have cratered in value since;
World Liberty Financial, cofounded by President Trump, his sons Don Jr., Eric, and Barron, and government envoy Steven Witkoff and his sons. World Liberty has issued its own $WLFI token and also issues the USD1 stablecoin. A UAE-based firm made a $2 billion investment in Binance using USD1. The company also applied to the OCC to charter a national trust bank this January;
Trump pardoned Binance founder Changpeng Zhao, commonly known as CZ, who pleaded guilty to willfully failing to maintain an anti-money laundering program. CZ was sentenced to four months in prison, and Binance paid a $4.3 billion fine as part of the settlement;
and American Bitcoin, a bitcoin mining firm cofounder by Eric Trump and Donald Trump Jr., which went public in September 2025 via a SPAC.
A recent analysis by Reuters shows that Trump and his family have seen their wealth increase by approximately $2.3 billion from their various crypto ventures, while investors in the various projects and tokens, including everyday Americans, have lost about about $2.3 billion.
Yet only 1 in 10 Americans actually reported any use of cryptocurrency in 2025, and, headed in the 2026 midterm elections, a Politico/Public First poll found that only 4% of Americans said candidates’ stance on crypto policy would influence how they voted — making it the literal last issue voters care about.
For their part, Democrats, led by ranking member of the Senate Banking Committee Sen. Elizabeth Warren (D-MA), have tried to co-opt the debanking narrative to align with their own policy goals.
Last year, in response to some of Trump’s debanking comments, Warren said that “Trump was on to a real problem when he criticized Bank of America for its debanking practices.”
But rather than point the blame at crypto use or political ideology, Warren suggested the bigger culprits behind debanking include how banks go about complying with the requirements of the Bank Secrecy Act, the PATRIOT Act, and related financial crimes compliance requirements, as well as forcible account closures for consumers repeatedly incurring overdraft fees.
Warren acknowledged that “[t]here are times when a bank has a legitimate reason, and a legal obligation, to freeze or close a bank account,” but argued that “banks may be implementing these legal obligations in a sloppy and overbroad manner to cut costs.”
The result, Warren has argued, is that groups that include the formerly incarcerated, Muslim and Armenian Americans, businesses in the cannabis industry, and international non-profits and charities have been unduly debanked.
Warren has positioned the CFPB, which has seen funding, staff, and enforcement activity severely curtailed under acting Director Russ Vought, as “the main federal agency working to stop unfair debanking.”
Regulation of the U.S. financial system has always been political, even if, historically, it was less explicitly so.
The Trump administration and Treasury Secretary Bessent have made no secret about their desire to exert more centralized control over the ostensibly independent banking regulators — the OCC, the FDIC, the NCUA, and, yes, the Federal Reserve. Some of the approaches have not exactly been subtle.
While the FDIC, by statue, is required to have five board members, including two of the opposition party, its board is currently composed only of Travis Hill, the Chair of the FDIC, Jonathan Gould, the Comptroller of the Currency, and Russ Vought, the acting Director of the CFPB.
Similarly, the NCUA is intended to have a three-member board, but, currently, the only sitting member is NCUA board Chair Kyle Hauptman — whose term in that role has expired. Hauptman continues to oversee the NCUA in a holdover capacity. Trump fired the two Democrat-appointed board members, Todd Harper and Tanya Otsuka; the case challenging their firings is working its way through the courts.
Likewise, the pressure Trump and others in his administration, most notably Federal Housing Finance Authority head Bill Pulte, have applied on the Federal Reserve and now-former Fed Chair Jerome Powell was not exactly subtle. Given the sensitivity of the Fed’s role setting interest rate policy, these attacks on Fed independence have garnered significantly more business press and mainstream media attention than the politicization of the FDIC, the OCC, and the NCUA.
To bring this back to U.S. Attorney Jeanine Pirro’s subpoenas of information related to alleged debanking by JPMorgan Chase, Bank of America, and others — this all isn’t to say that that specific action is part of some well-thought-out master plan.
Rather, it appears to be part of a pattern of behavior across the administration of undermining any semblance of regulatory independence, of attacking any entities Trump perceives as enemies or as having wronged him, and of taking actions that favor Trump, his businesses, and his allies.
While this strategy may pay off in the short term, there is no guarantee that when the shoe is on the other foot, Democrats won’t respond in kind. In the medium to longer term, the result is likely to be an increasingly uncertain regulatory environment with sharpening policy swings administration to administration.
Dem Senators Oppose Grasshopper Acquisition by High APR Lender
Late last month, Democratic Senators Warren (D-MA) and Van Hollen (D-MD) sent Comptroller Gould and Federal Reserve Chair Warsh a letter opposing online lender Enova’s proposed acquisition of OCC-chartered Grasshopper Bank. (Full disclosure, I worked at Enova from 2011-2013.)
In their letter, Warren and Van Hollen write that “Enova’s history of predatory lending and regulatory noncompliance render its application inconsistent with the standard for approval under the Bank Merger Act and Bank Holding Company Act.”
Warren and Van Hollen focus primarily on Enova’s consumer products, CashNetUSA and NetCredit, which offer cash advances, lines of credit, and installment loans. The Senators describe these products as “primarily target[ing] financially vulnerable consumers with high debt loads and poor credit histories who would struggle to handle additional debt.”
Warren and Van Hollen flag the high interest rates on Enova’s CashNetUSA and NetCredit products, which can reach up to 300% APR (though the intended duration of many of the products is less than a year, which mechanically will equate to a very high annualized percentage rate.)
The letter also highlights Enova’s use of bank partnerships, which the Senators refer to as a “rent-a-bank” scheme: “Rent-a-bank schemes are of questionable legality, and many courts have applied anti-evasion laws to pierce through these schemes and determine that the nonbank lender is the ‘true lender’ that must then comply with state interest rate laws.13 Enova currently avoids states that have interest rate limits and actively enforce those laws against predatory interest rates.”
As part of its pending acquisition of Grasshopper Bank, Enova has proposed moving the bank’s headquarters from New York, which has a 25% usury cap, to Utah, which has no usury cap.
Warren and Van Hollen highlight this proposed change, suggesting that “Enova appears to be attempting to expand its predatory lending operations to every state in the country without regard to state licensing and anti-evasion laws.”
Warren and Van Hollen argue that Enova’s business model is incompatible with the safe and responsible lending requirements of the Bank Merger Act and the Bank Holding Company Act. The Senators also flag what they describe as the company’s “track record of serious regulatory noncompliance,” including a combined $18.2 million in civil money penalties for multiple instances of debiting consumers’ bank accounts without authorization.
Ultimately, Warren and Van Hollen urge the OCC and the Fed to reject Enova’s bid to acquire Grasshopper Bank — though, in the current, more permissive regulatory environment, their request seems likely to fall on deaf ears.
[Paid Subscriber Exclusive] Trump Nominates New CFPB Director, FTA Sues to Block Tennessee Remittance Tax, Colorado Gov Vetoes Interchange Law
Is Russ Vought’s time as acting Director of the Consumer Financial Protection Bureau coming to an end? With Trump’s nomination of a former CFPB deputy director and current Capital One executive, it seems like that may be the case.