How could Chokepoint 2.0 impact the cryptocurrency industry?

Strike CEO Debanked by JPMorgan: Lummis Warns of “Chokepoint 2.0” Threat

Introduction: A Flashpoint in Crypto-Banking Relations

JPMorgan Chase’s closure of accounts linked to Strike CEO Jack Mallers has reignited fears of “Operation Chokepoint 2.0”-the idea that banks and regulators are informally pressuring financial institutions to cut off lawful crypto activity. Senator Cynthia Lummis, one of the most prominent pro-crypto voices in Washington, publicly warned that debanking innovators risks replicating the off-ramping tactics seen in the original Operation Choke Point. For a Bitcoin- and web3-focused audience, this moment highlights the structural fragility of fiat rails, compliance overhangs, and the ongoing need for policy clarity as crypto becomes more integrated with mainstream finance.

What Happened: JPMorgan Debanks Strike’s Jack Mallers

According to Mallers’ public statements, JPMorgan Chase closed his accounts without providing a detailed rationale. While individual account actions are typically governed by confidential risk assessments and bank policies, the optics are unmistakable: a major U.S. bank offboarding a high-profile Bitcoin entrepreneur whose company, Strike, builds Lightning-powered payments infrastructure and offers global remittances and fiat on/off-ramps.

Key context for crypto readers:

• Strike focuses on low-cost, instant Bitcoin and Lightning payments, acting as a bridge between traditional bank accounts and BTC/Lightning rails in numerous countries.
• U.S. banks maintain conservative risk appetites for crypto exposure, particularly where perceived AML/CFT risks, sanction exposure, or operational complexity exist-even when customers operate legally.
• Similar offboarding events have periodically hit founders, OTC desks, exchanges, miners, and payment processors since 2019, rising to public attention in 2022-2024 amid broader regulatory scrutiny.

“Operation Chokepoint 2.0”: Why Lummis Is Sounding the Alarm

Senator Cynthia Lummis has repeatedly warned that informal pressure on banks to de-risk lawful crypto businesses amounts to a “Chokepoint 2.0,” a reference to the 2013-2015 program where certain industries were allegedly targeted via banking cutoffs. While there is no formal, public directive singling out crypto, the cumulative effect of supervisory guidance, enforcement actions, and reputational risk can push banks to offboard crypto-affiliated clients.

What makes this a policy flashpoint

• Bank regulators focus on AML/CFT and safety-and-soundness risks; banks often over-comply to avoid headlines and enforcement.
• Crypto firms need reliable fiat access for payroll, vendors, customer deposits/withdrawals, and card networks-losing accounts can halt operations.
• The U.S. is simultaneously approving mainstream products (e.g., spot Bitcoin ETFs in 2024) while banks remain skittish, producing a credibility gap.

Implications for Bitcoin, Lightning, and Fintech Builders

Debanking episodes have both practical and strategic consequences for web3 builders:

1. Operational continuity risk: Account closures can impair payouts, settlements, and compliance workflows.
2. Cost inflation: Redundant banking, additional compliance tooling, and legal contingencies raise operating costs.
3. User friction: Slower fiat on/off-ramps can blunt product-market fit, especially for remittances and merchant payments.
4. Jurisdictional drift: Teams may favor crypto-forward jurisdictions for HQs, licensing, or payment corridors.

How Crypto Companies Can Reduce Debanking Risk

Practical steps for founders and compliance teams

• Establish multi-bank relationships early, with staggered account purposes (operating, treasury, settlements).
• Segment high-risk flows from consumer flows; isolate counterparties with heightened AML profiles.
• Adopt best-in-class AML/CFT and blockchain analytics; document decisions and SAR rationales thoroughly.
• Implement clear travel rule compliance where applicable; maintain robust sanctions screening.
• Design stablecoin and Lightning flows with traceability and counterparty controls (e.g., allowlists, risk-adjusted limits).
• Maintain proactive communication with bank partners: share policies, audits, examiner feedback, and independent reviews.

Policy Outlook: From “De-Risking” to Clear Rules

The policy landscape is evolving but incomplete as of 2025:

• Congress has debated comprehensive market structure and stablecoin bills, but final passage remains uncertain.
• The SEC’s 2024 approval of spot Bitcoin ETFs normalized certain exposures, yet did not resolve bank-on-crypto risk appetite.
• FinCEN and Treasury continue prioritizing illicit finance risks (e.g., mixers, sanctions evasion), shaping bank compliance posture.
• Lawmakers like Lummis advocate statutory clarity so banks can serve compliant crypto businesses without fear of informal pressure.

Bottom line: until there is a consistent federal framework that distinguishes compliant crypto activity from prohibited conduct, banks may continue to err on the side of offboarding-even when customers meet legal standards.

Conclusion: A Stress Test for Crypto-Fiat Interoperability

The reported debanking of Strike’s Jack Mallers by JPMorgan underscores a core reality of the crypto industry in 2025: Bitcoin and Lightning can move value globally, but fiat access remains a single point of failure for many web3 companies. Lummis’s warning about a renewed “Chokepoint 2.0” captures the fear that informal pressures, rather than transparent rules, are shaping market access. Builders should harden their banking strategies, fortify compliance, and diversify rails-while the industry continues pressing for clear, durable legislation that lets banks serve lawful crypto innovation without second-guessing.