On December 11, Senator Tim Scott highlighted concerns regarding alleged regulatory overreach targeting the cryptocurrency sector. Speaking from Washington, D.C., Scott addressed issues related to financial regulators potentially limiting banking access for politically disfavored industries.

"No legitimate business should be debanked," said Scott, Senator for South Carolina. "Unelected bureaucrats in D.C. should not be deciding which businesses survive or fail based on their political agendas."

According to a 2014 report from the House Committee on Oversight and Government Reform, Operation Choke Point was initiated by the Department of Justice in 2013. The operation aimed to reduce fraud and illegal activity by pressuring financial institutions to sever relationships with industries deemed high-risk, such as payday lenders and firearms dealers.

Sen. Tim Scott on debanking during a Senate Banking Hearing | https://x.com/taylorjbarr/status/1866866258655818143

The House Oversight Committee's 2014 report said that Operation Choke Point was designed to deny legal businesses access to essential banking and payment networks by labeling them as "high risk" due to reputational concerns. The report suggested that the initiative pressured banks to cut ties with lawful merchants, including firearms dealers and coin sellers, through implicit threats of federal investigation. It also noted that the Department of Justice lacked sufficient legal authority for the program, expanding its powers under Section 951 of the Financial Institutions Reform, Recovery, and Enforcement Act beyond its intended purpose.

A report by International Business Times indicates that several prominent figures and firms in the cryptocurrency industry, including Custodia Bank and Gemini Exchange, have reported being repeatedly debanked. Caitlin Long, CEO of Custodia Bank, described ongoing struggles involving litigation to gain access to Federal Reserve services. Crypto leaders have linked these actions to what they refer to as "Operation Choke Point 2.0," alleging a coordinated effort by regulators to restrict the industry's access to banking.

According to his official Senate biography, Tim Scott is a U.S. Senator from South Carolina who grew up in North Charleston in a single-parent household. A graduate of Charleston Southern University and a former small business owner, he has served in the Senate since 2013.