White House Cracks Down: Banks Face Fines for Crypto Discrimination in Landmark Move

The Biden administration just dropped a regulatory hammer—banks could now pay hefty penalties for sidelining crypto firms. A seismic shift in financial policy, or just political theater ahead of the 2026 midterms?

The New Rules: No More 'Banking Blacklist'

Federal watchdogs will now treat crypto discrimination like racial or gender bias—complete with seven-figure fines. Suddenly, Wall Street's 'risk management' excuses sound flimsier than a meme coin whitepaper.

Crypto's Revenge Tour

After years of account closures and 'de-risking,' digital asset companies finally get regulatory armor. Too bad most banks still think DeFi stands for 'Definitely Fraudulent.'

The Fine Print

Expect lawsuits. Expect lobbying. And definitely expect banks to launch 'crypto-friendly' initiatives that somehow still involve 400% APY stablecoin products. Some things never change—like finance's knack for rebranding exclusion as 'compliance.'

Banks Found To Be In Violation Could Face Significant Consequences

Financial institutions have been guilty of “de-banking” or denying services to or terminating accounts or businesses for reasons other than financial risk. The banks found to be in violation could face monetary penalties, consent decrees, and other disciplinary actions. 

The order also empowers regulators to refer specific cases of potential violations to the US Attorney General for further action.

While the draft executive order does not name any specific banks, it refers incidents that have drawn public criticism.

Furthermore, a White House report that dropped just days ago calls for the CFTC to get clear authority over crypto exchanges that deal with non-security tokens. It also urges regulators to finally settle the debate over stablecoin rules and self-custody protections. One standout suggestion is the CLARITY Act, which aims to put an end to the jurisdictional tug-of-war between agencies.

Are Banks Paying Heed To Eric Trump’s Warning?

On 1 May 2025, Morgan Stanley revealed its plan to launch crypto trading through its E-Trade platform. The bank plans to launch the crypto services in 2026. However, the project is in its nascent stage for now. Furthermore, Morgan Stanley is considering partnering with one or multiple established crypto firms as it sets up the mechanics for the brokerage’s clients to buy and sell popular tokens, including Bitcoin and Ether.

Notably, the move comes as Eric Trump, Executive Vice President of the TRUMP organization and, of course, the son of US President Donald Trump, issued a warning of extinction to traditional banks.

The financial landscape, specifically traditional banking, is going through a seismic shift, with digital assets and decentralized finance (DeFi) gaining trust among users.

Eric Trump has chosen a side. “There’s nothing that can be done on blockchain that can’t be done better than the way that the current financial institutions are working,” he said. “The modern financial system is broken, it’s slow, it’s expensive.”

Key Takeaways

• Financial institutions have been guilty of “de-banking” or denying services to or terminating accounts or businesses for reasons other than financial risk. 

• Recently, Eric Trump issued a warning of extinction to traditional banks.