The U.S. Federal Reserve has officially removed “reputational risk” from its bank examination criteria, a major win for the crypto industry that has long battled what it calls unfair debanking practices. The move follows similar steps by the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) earlier this year.
Crypto Firms Hail End of Reputational Scrutiny
The decision was announced on June 29, 2025, and marks a turning point in how regulators evaluate bank relationships with digital asset firms. Under previous guidance, banks were discouraged—directly or indirectly—from serving crypto clients if it was believed their association could damage the bank’s public image.
“Crypto firms have faced industry-wide debanking under the guise of reputational risk,” said one blockchain industry executive. “This change gives us a chance to rebuild financial bridges.”
The practice came under fire after the 2022 collapse of FTX, which led to enhanced scrutiny of crypto-related banking activity. Many in the industry referred to the crackdown as “Operation Chokepoint 2.0,” echoing an earlier government effort to limit access to financial services for politically sensitive industries.
Focus Shifts to Measurable Financial Risks
In a statement, the Federal Reserve clarified that banks must still maintain strong internal risk controls, especially when serving high-risk sectors like crypto. However, “reputational risk” will no longer be a standalone justification for limiting or severing business relationships.
This policy realignment brings consistency across U.S. bank regulators, offering clearer standards for oversight. It is expected to open the door for more stable banking relationships between traditional financial institutions and crypto businesses.
Political Support and Industry Response
The announcement was welcomed by Senator Cynthia Lummis, President Donald Trump, and numerous crypto leaders, who have pushed for a pro-crypto regulatory environment. Trump previously accused regulators of targeting crypto firms under the Biden administration, and this change is seen as a response to such concerns.
“This is a key step toward restoring fairness and transparency,” said a spokesperson for a U.S.-based crypto advocacy group.
A New Era for Crypto Banking?
The end of reputational risk exams could mark the beginning of a more balanced and innovation-friendly regulatory era. As crypto firms regain access to essential banking services, the U.S. financial system may be better positioned to support the growing blockchain economy.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.