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An investigation in the U.S. House of Representatives and a hearing in the Senate will examine whether financial regulators during the administration of former President Joe Biden deliberately cut off crypto industry leaders and others from the banking system in an inappropriate use of authority. “Debanking is un-American — every legal business deserves to be treated the same regardless of their political beliefs," said Senate Banking Committee Chair Tim Scott, a South Carolina Republican who took over the gavel earlier this month and has scheduled a February 5 hearing on debanking. "Unfortunately, under Operation Chokepoint 2.0, Biden regulators abused their power and forced financial institutions to cut off services to digital asset firms, political figures, and conservative-aligned businesses and individuals." Operation Chokepoint 2.0 is the name Republican lawmakers and the digital assets industry have been using for the systemic severing of crypto insiders from U.S. banks, in reference to an earlier era`s Operation Chokepoint — a government-sanctioned effort to reduce risk in banking by encouraging the lenders to back away from legal but otherwise risky businesses. Delving into the struggle of crypto executives and businesses to maintain banking relationships, the House Oversight Committee is "investigating whether this debanking practice originates from the financial institutions themselves or from either implicit or explicit pressure from government regulators," according to a letter the committee chairman, Representative James Comer, sent on Friday to founders and CEOs of several crypto companies and organizations, including Coinbase, Lightswap and Uniswap Labs. The challenge of pinning the lack of banking options entirely on the government is that some financial institutions may have made decisions based on their own risk appetites or business plans that deliberately steered clear of crypto interests. And banking regulators such as the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency were public in their guidance that regulated banks seeking to do crypto business would face restrictions and additional scrutiny from the agencies. However, a Coinbase pursuit of private FDIC communications with banks demonstrated that the agency directed them to stop pursuing digital assets services until the regulator had specific rules in place, which it wasn`t developing. "We are grateful to assist in the thorough investigation of this pernicious practice,” said Kristin Smith, CEO of the Blockchain Association, which also received the House committee`s letter probing the trend. Meanwhile, congressional Democrats have been focusing their own investigation requests on President Donald Trump`s recently launched meme coin, $TRUMP . He`s been accused of using the presidency to rack up billions of dollars, and they cite the token as a potential risk for dangerous conflicts of interest.
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Policy US Congress Investigations Banking Senate Banking Committee House Oversight Committee Blockchain Association
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Ethereum Achieves 17x Scaling with Layer 2, but Challenges Persist, Says Buterin
Layer 2 protocols have played a critical role in scaling the Ethereum network. The blockchain’s co-founder Vitalik Buterin noted that Layer 2s in 2025 represents a significant evolution from their experimental beginnings in 2019, having achieved certain decentralization milestones, secured billions of dollars in value, and scaled Ethereum’s transaction capacity by 17-fold, all while simultaneously lowering fees. However, Buterin stated that challenges remain, particularly around scaling and heterogeneity. Blob Space and Interoperability Challenges In his latest blog post , Buterin pointed out that Ethereum’s current blob space – a resource for storing and processing data on the blockchain – barely meets the demands of today’s Layer 2s and their use cases. As such, this limitation could hinder the platform’s ability to accommodate future growth. Additionally, the heterogeneity of Layer 2s creates challenges when it comes to interoperability, composability, and user experience. While Ethereum’s initial vision for scaling involved a shard-based system of homogenous blockchains, Buterin noted that Layer 2s have instead evolved into a fragmented ecosystem of chains created by different actors, each with different standards and infrastructure requirements. To address these challenges, the Ethereum co-founder outlined several key steps. On the Layer 1 side, Ethereum must accelerate scaling blobs and expand the Ethereum Virtual Machine (EVM) and gas limits to handle activities such as proofs, large-scale DeFi, deposits, withdrawals, and mass exit scenarios. On the Layer 2 front, he stressed the need for improved security, ensuring guarantees such as censorship resistance, light client verifiability, and the absence of trusted parties. Interoperability across Layer 2s and wallets must also be prioritized to enable easy interactions across chains through standardized addresses, message-passing protocols, bridges, and efficient cross-chain payments. For users, Ethereum should feel like a unified ecosystem rather than a collection of disparate chains, Buterin added. Strengthening ETH as a Triple-Point Asset Buterin also stated that Ethereum’s future as a strong triple-point asset – functioning as a store of value, medium of exchange, and unit of account – requires a “multi-pronged” strategy to maximize the value of ETH . The first step is to cement ETH as the primary asset across the combined Layer 1 and Layer 2 Ethereum economy. This includes prioritizing ETH, the main collateral for decentralized applications and financial ecosystems. Next comes incentivizing Layer 2s to allocate a portion of their fees toward the broader Ethereum ecosystem, which could generate sustainable funding. This may involve burning part of the fees, staking them, or channeling proceeds into public goods for the Ethereum network. Third, while rollups offer opportunities for Layer 1 to capture value through MEV, it’s important to maintain flexibility, recognizing that not all rollups can adopt this model due to different application requirements. Finally, Ethereum could explore raising the blob count as a potential revenue stream. The post Ethereum Achieves 17x Scaling with Layer 2, but Challenges Persist, Says Buterin appeared first on CryptoPotato . CoinDesk
Solana Horse Racing Game `Photo Finish Live` Teams With BlockBet for Betting
Photo Finish Live is collaborating with betting platform BlockBet, enabling the CROWN token for wagers alongside a simulcast collab. CoinDesk
