Austin Campbell, the CEO of WSPN, said that banking regulation requires reform to become clearer and more transparent to prevent further industries from being targeted by debanking. Campbell made his remarks during a February 6 hearing on Operation Choke Point 2.0.
"Here, however, I want to put the most important point first: it is essential Congress reforms banking supervisory practices to ensure that, years down the road, we are not holding hearings on Operation Chokepoint 3.0, 4.0, 5.0, 6.0, and onward to infinity," said Campbell. "It is also obvious that the crypto space was denied adequate banking services, and the confidential nature of the discussions are making it impossible to determine precisely how or why that happened, which again is itself the problem. To that end, the most important reform possible is the elimination of both confidential and verbal guidance by banking regulators. All supervisory guidance should be written, and verbal guidance alone without being put in writing should be cause for immediate termination and personal liability for banking regulators."
According to Campbell's testimony, debanking refers to the denial of basic financial services, such as having a checking account and making payments. He explained that debanking aimed at the crypto industry, termed Operation Choke Point 2.0, did not solely target entities accused of anti-money laundering violations or other criminal activities. Instead, individuals and firms involved in areas such as consulting, creating digital art on blockchains, and software engineering were denied access to banking services due to "crypto exposure."
Campbell highlighted that the "most significant problem" is that regulators were able to carry out Operation Choke Point 2.0 even after Congress addressed the original Operation Choke Point under the Obama administration, which targeted "disfavored industries" like payday lenders. He argued that this issue reemerged because banking supervision remains secretive and confidential. Campbell emphasized that those most affected by debanking are already poor and marginalized individuals, stating that one of "the biggest losers here is America itself," as entrepreneurs lose confidence and the U.S. suffers reputational harm.
Campbell called for reforms "to ensure that this sort of activity, deliberate or merely cruelly indifferent, stops happening to law-abiding American citizens and businesses." He recommended that all banking supervisory guidance should be written instead of verbal, unredacted, and public. Additionally, he suggested that if a bank closes a client's account, the client should receive a clear and truthful reason. Campbell also argued against allowing regulators to consider "reputational risk" as a risk factor due to its vagueness and frequent misuse.
On February 5, the Federal Deposit Insurance Corporation (FDIC) released 175 documents related to its supervision of banks involved in crypto-related activities. FDIC Acting Chairman Travis Hill said that these documents show the FDIC's actions sent a message to banks indicating it would be extraordinarily difficult—if not impossible—to proceed with crypto-related activities, leading many banks to cease their efforts. Hill mentioned that moving forward, the FDIC will revise its approach to crypto-related supervision.
Campbell assumed his role as CEO of WSPN in October. According to LinkedIn, he is also an adjunct professor at New York University’s Stern School of Business and the founder of Zero Knowledge Consulting.
