Crypto debanking is not over until Jan 2026: Caitlin Long
Update March 22, 2025, 10:08 a.m. UTC: This article has been updated to include an embed of the Chainreaction episode.
The cryptocurrency industry may still be facing debanking-related issues in the United States, despite the recent wave of positive legislation, according to crypto regulatory experts and industry leaders.
The collapse of crypto-friendly banks in early 2023 sparked the first allegations of Operation Chokepoint 2.0. Critics, including venture capitalist Nic Carter, described it as a government effort to pressure banks into cutting ties with cryptocurrency firms.
Despite numerous crypto-positive decisions from US President Donald Trump, including the March 7 order to use Bitcoin (BTC) seized in government criminal cases to establish a national reserve, the industry may still be facing banking issues.
“It’s premature to say that debanking is over,” according to Caitlin Long, founder and CEO of Custodia Bank. Long said during Cointelegraph’s Chainreaction daily X show on March 21:
“There are two crypto-friendly banks under examination by the Fed right now and an army of examiners was sent into these banks, including the examiners from Washington, a literal army just smothering the banks.”
The Crypto Debanking Crisis: #CHAINREACTION https://t.co/nD4qkkzKnB
— Cointelegraph (@Cointelegraph) March 21, 2025
“The Fed is the outlier and the Fed is still controlled by democrats,” explained Long, adding:
“Trump won’t have the ability to appoint a new Fed governor until January. So therefore you can see the breadcrumbs leading up to a potentially big fight. Because if the OCC and FDIC overturn their anti-crypto guidance but the Fed does not, where does that leave us?”
Long’s Custodia Bank was repeatedly targeted by the US debanking efforts, which cost the firm months of work and “a couple of million dollars,” she explained.
Industry outrage over alleged debanking reached a crescendo when a June 2024 lawsuit spearheaded by Coinbase resulted in the release of letters showing US banking regulators asked certain financial institutions to “pause” crypto banking activities.
Related: FDIC chair, ‘architect of Operation Chokepoint 2.0’ Martin Gruenberg to resign Jan. 19
Crypto debanking is the biggest operational problem in EU: blockchain regulations adviser
Cryptocurrency debanking is also among the biggest challenges for European cryptocurrency firms, according to Anastasija Plotnikova, co-founder and CEO of blockchain regulatory firm Fideum.
“We’re living in 2025 and debanking is still one of the main operational issues for both small and large crypto firms,” said Plotnikova, adding:
“Crypto debanking is also a problem here in the EU. I had my accounts closed in 2017, 2018, 2019, 2021, and 2022, but 2024 was a good year. Operationally these problems exist for both users and crypto firms operating.”
Related: Paolo Ardoino: Competitors and politicians intend to ‘kill Tether’
The comments come two weeks after the US Office of the Comptroller of the Currency (OCC) eased its stance on how banks can engage with crypto just hours after US President Donald Trump vowed to end the prolonged crackdown restricting crypto firms’ access to banking services.
Trump’s remarks were made during the White House Crypto Summit, where he told industry leaders he was “ending Operation Chokepoint 2.0.”
Source: Elon Musk
At least 30 tech and crypto founders were “secretly debanked” in the US during Operation Chokepoint 2.0, Cointelegraph reported in November 2024.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
Politics
Civil service to be ordered to cut more than £2bn from budget – as Reeves rules out tax rises in spring statement
The civil service is to be told to cut more than £2bn from its budget as part of the government’s spending review.
Chancellor Rachel Reeves is expected to unveil spending cuts during the spring statement next week – and has reportedly ruled out tax rises.
The FDA union has said the government needs to be honest about the move, first reported by The Telegraph, and the “impact it will have on public services”.
Civil service departments will first have to reduce administrative budgets by 10%, which is expected to save £1.5bn a year by 2028-29.
The following year, the reduction should be 15%, the Cabinet Office will say – a saving of £2.2bn a year.
Administrative budgets include human resources, policy advice and office management, rather than frontline services.
The chancellor has also said she won’t be putting up taxes on Wednesday, telling The Sun On Sunday: “This is not a budget. We’re not going to be doing tax raising.”
Ms Reeves added: “We did have to put up some taxes on businesses and the wealthiest in the country in the budget [in the autumn].
“We will not be doing that in the spring statement next week.”
The chancellor has repeatedly insisted she won’t drop her fiscal rules which preclude borrowing to fund day-to-day spending.
:: Rachel Reeves, Mel Stride and Daisy Cooper appear on Sunday Morning with Trevor Phillips from 8.30am
Civil service departments will receive instructions from the Chancellor of the Duchy of Lancaster Pat McFadden in the coming week, The Telegraph reported.
“To deliver our Plan for Change we will reshape the state so it is fit for the future. We cannot stick to business as usual,” a Cabinet Office source said.
“By cutting administrative costs we can target resources at frontline services – with more teachers in classrooms, extra hospital appointments and police back on the beat.”
The move comes after the government last week revealed welfare cuts it believes will save £5bn a year by the end of the decade.
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FDA general secretary Dave Penman said the union welcomed a move away from “crude headcount targets” but that the distinction between the back office and frontline is “artificial”.
“Elected governments are free to decide the size of the civil service they want, but cuts of this scale and speed will inevitably have an impact on what the civil service will be able to deliver for ministers and the country…
“The budgets being cut will, for many departments, involve the majority of their staff and the £1.5bn savings mentioned equates to nearly 10% of the salary bill for the entire civil service.”
Ministers need to set out what areas of work they are prepared to stop as part of spending plans, he said.
“The idea that cuts of this scale can be delivered by cutting HR and comms teams is for the birds. This plan will require ministers to be honest with the public and their civil servants about the impact this will have on public services.”
Read more:
Analysis: UK growth forecast set for major downgrade
What could be announced in the spring statement?
The spring statement – what you need to know
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What to expect from the spring statement
Mike Clancy, general secretary of the Prospect union, warned that “a cheaper civil service is not the same as a better civil service”.
“Prospect has consistently warned government against adopting arbitrary targets for civil service headcount cuts which are more about saving money than about genuine civil service reform.
“The government say they will not fall into this trap again. But this will require a proper assessment of what the civil service will and won’t do in future.”
Cryptocurrency wallet providers are getting more sophisticated, but so are bad actors — which means the battle between security and threats is at a deadlock, says a hardware wallet firm executive.
“It will always be a cat and mouse game,” Ledger chief experience officer Ian Rogers told Cointelegraph when describing the constant race between crypto wallet firms adding new security features and hackers finding more advanced ways to access victims’ wallets.
Rogers said, unfortunately, the most straightforward scams work best because scammers rely on people making simple mistakes.
“People give their 24-word phrases to people every day, so as long as that happens, then they are going to go for the low-cost tax,” he said, adding:
“Anyone who asks for your 24 words is a criminal.”
Rogers highlighted a common crypto scam where victims get tricked by replies under “any post on Twitter about crypto,” with messages like “DM me, and I’ll help you.”
“You know that scammers are always asking you for your 24 words,” Rogers said. CertiK chief business officer Jason Jiang recently told Cointelegraph that being aware of phishing attacks on social media can drastically increase a user’s crypto security.
Sometimes, scammers hijack the accounts of well-known industry figures to post malicious links, making it even harder for users to spot the scam.
In September 2023, Ethereum co-founder Vitalik Buterin’s account was compromised, leading to a fake NFT giveaway that tricked followers into clicking — only to drain over $691,000 from their wallets.
Source: CertiK
Rogers emphasized that this will always be the case, just as bad actors aren’t limited to crypto — scams like fake emails from the “Nigerian president” have been around for years.
“The cost of the attack is always commensurate with the size of the prize, right?” Rogers said. In 2024, crypto hacks jumped 15% from 2023, with over $3 billion stolen.
Related: Hacker steals $8.4M from RWA restaking protocol Zoth
Meanwhile, pig butchering scams have emerged as one of the most pervasive threats to crypto investors, with losses on the Ethereum network costing the industry $5.5 billion across 200,000 identified cases in 2024.
Pig butchering is a type of phishing scheme that involves prolonged and complex manipulation tactics to trick investors into willingly sending their assets to fraudulent crypto addresses.
Magazine: Dummies guide to native rollups: L2s as secure as Ethereum itself
Bilal Bin Saqib, the CEO of Pakistan’s Crypto Council, has proposed using the country’s runoff energy to fuel Bitcoin (BTC) mining at the Crypto Council’s inaugural meeting on March 21.
According to an article from The Nation, the council is exploring comprehensive regulatory frameworks for cryptocurrencies to attract foreign direct investment and establish Pakistan as a crypto hub.
The meeting included lawmakers, the Bank of Pakistan’s governor, the chairman of Pakistan’s Securities and Exchange Commission (SECP), and the federal information technology secretary. Senator Muhammad Aurangzeb had this to say about the meeting:
“This is the beginning of a new digital chapter for our economy. We are committed to building a transparent, future-ready financial ecosystem that attracts investment, empowers our youth, and puts Pakistan on the global map as a leader in emerging technologies.”
The Crypto Council represents a radical departure from the government of Pakistan’s previous stance on crypto. In May 2023, former minister of state for finance and revenue, Aisha Ghaus Pasha said crypto would never be legal in the country.
Pasha cited anti-money laundering restrictions under the Financial Action Task Force (FATF) as the primary motivation for the government’s anti-crypto stance.
The presence of Bitcoin miners can stabilize electrical grids. Source: Science Direct
Related: Pakistan eyes crypto legal framework to boost foreign investment
Pakistan follows the United States in embracing crypto
The government of Pakistan moved to regulate cryptocurrencies as legal tender on Nov. 4, 2024 — the same day as the elections in the United States.
Following the re-election of Donald Trump in the US and the Jan. 20 inauguration, Trump moved quickly to establish pro-crypto policies at the federal level.
On Jan. 23, President Trump signed an executive order establishing the Working Group on Digital Assets — an executive advisory council tasked with exploring comprehensive regulatory reform on digital assets.
President Trump signs executive order establishing the President’s Working Group on Digital Assets. Source: The White House
The Jan. 23 order also prohibited the government from researching, developing, or issuing a central bank digital currency (CBDC).
President Trump also signed an executive order creating a Bitcoin strategic reserve and a separate digital asset stockpile in March 2025 that will likely include cryptocurrencies made by US-based firms.
Magazine: How crypto laws are changing across the world in 2025
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