Fed Proposes Scrapping ‘Reputation Risk’ to Address Crypto Debanking Concerns
Bank supervisors have long considered “reputation risk” in their assessments, potentially prompting banks concerned about regulatory pressure to deny or terminate accounts and payment services for legitimate crypto businesses. The industry calls this “debanking,” arguing that vague standards can restrict companies’ access to financial services and allow regulators to influence banks’ choice of customers indirectly.
The U.S. Federal Reserve has proposed formally removing “reputation risk” from its bank-supervision rules and requiring examiners to rely instead on measurable financial, operational and compliance risks. The proposal entered a 60-day public-comment period after its publication. Crypto lobbying groups support codifying the change in formal rules, hoping to prevent the policy from being reversed when the government’s stance changes.
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The history behind this eventFed Seeks Comment on Plan to End 'Operation Chokepoint 2.0' and Address Crypto Debanking
'Operation Chokepoint 2.0' is the crypto industry's term for U.S. regulatory pressure that allegedly led banks to deny or terminate services; it was not a formal government program. On June 23, 2025, the Federal Reserve stopped considering 'reputational risk' in bank examinations. The change was intended to prevent lawful businesses from losing access to accounts, loans and payment channels solely because of perceptions tied to their politics, religion or industry.
The Federal Reserve Board issued a proposed rule on February 23, 2026, and published it in the Federal Register on February 26. The 60-day comment period ended on April 27. The proposal would prohibit the Fed from using reputational risk to pressure supervised banks into denying or restricting services to lawful customers. It does not involve subsidies, penalties or transaction amounts; its purpose is to codify existing supervisory policy in a binding rule.
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