The Blockchain Association pressed the Federal Reserve on Monday to formally remove “reputation risk” from its bank supervision framework, aligning with rules the Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation finalized April 7. The push reflects crypto industry concern that without permanent codification, future administrations could weaponize vague supervisory standards to justify debanking digital asset firms.
How Reputation Risk Became a Debanking Tool
Reputation risk—a supervisory concept allowing regulators to pressure banks away from “reputationally risky” clients—became the legal mechanism behind “Operation Chokepoint 2.0,” an informal campaign that cut crypto companies from the banking system. A January 2026 Cato Institute study found most US debanking cases resulted from government pressure rather than independent bank risk assessment. The Trump administration reversed these policies, but the Blockchain Association argues that without formal rules, hostile regulators could reimpose them. Ashok Pinto, EVP of legal and government relations at the Blockchain Association, stated: “Reputation risk is only as neutral as the administration wielding it.”
OCC and FDIC Already Moved; Fed Lags
The OCC and FDIC removed reputation risk as an examination component in June 2025 and finalized the rule change April 7, 2026. The Federal Reserve has not yet adopted equivalent language. In the April 28 letter, Pinto urged the Fed to “move expeditiously to finalize and codify the removal of reputation risk from its supervisory framework.” He added: “A standard harmonized across federal departments and agencies would provide regulated entities with the clarity and predictability they are owed.” The Fed has not announced a timeline or formal response.
Codification as Political Safeguard
The Blockchain Association frames the request as depoliticizing bank regulation. Pinto wrote: “Regulation is meant to uphold the integrity of our financial system, not to pick winners and losers based on the political winds of the day.” Codifying the rule would require formal rulemaking—harder to reverse than administrative policy shifts. The crypto industry views this as protection against future administrations reversing Trump-era debanking reversals, establishing a durable baseline that transcends political cycles.
Next Step: Fed Decision Timeline Unknown
The Federal Reserve’s board must decide whether to initiate formal rulemaking to match OCC and FDIC standards. No public timeline has been announced. The outcome will determine whether reputation risk removal becomes a permanent regulatory standard or remains subject to administrative discretion. The letter represents a critical juncture: without Fed alignment, the rule remains incomplete across the federal banking system.
