The Impact of Operation Choke Point 2.0 on the Crypto Industry
As the discussion surrounding Operation Choke Point 2.0 gains momentum with Trump’s impending second term in office, the crypto industry finds itself at the center of this controversial program once again. Many in the sector are hopeful that Trump will take decisive action to dismantle it, given its unfair targeting of crypto businesses.
Understanding Operation Choke Point 2.0
Operation Choke Point 2.0 is believed to be a program initiated by the Biden administration and US regulators to limit the crypto industry’s access to the banking system. Seen as a successor to the original Operation Choke Point launched during the Obama era, this new operation aims to investigate banks and their relationships with high-risk industries to combat fraud and money laundering.
The alleged objective of Operation Choke Point 2.0 is to use regulatory pressure to coerce banks into severing ties with crypto businesses, similar to how the original operation targeted payday lenders and firearms dealers.
Evidence of Choke Point 2.0’s Existence
While the current administration denies the existence of Operation Choke Point 2.0, critics point to enforcement actions taken by financial regulators such as the SEC, FDIC, and OCC as proof of its ongoing operations. The crackdown on banks providing services to crypto firms became apparent after federal regulators issued a joint statement in January 2023 warning about crypto asset risks.
Subsequent events, including the turmoil faced by Silvergate Bank and Signature Bank, further fueled speculation about the existence of this program. Silvergate’s connection to the failed crypto exchange FTX and Signature Bank’s bank run following the collapse of Silicon Valley Bank raised concerns about regulatory pressure on banks dealing with the crypto sector.
The Continued Struggle for Crypto Businesses
More recently, additional banks with ties to the crypto industry have faced pressure to restrict their services, indicating an ongoing campaign against crypto and tech companies. The Fed’s enforcement action against Customers Bank and the reported difficulties faced by crypto hedge funds in accessing basic banking services underscore the challenges faced by the industry.
Trump’s Promises and the Future of Operation Choke Point 2.0
During his campaign, Trump vowed to end Operation Choke Point 2.0 if elected, highlighting his commitment to supporting the crypto industry. With the departure of key figures like SEC Chair Gary Gensler and FDIC Chairman Martin Gruenberg, there is anticipation that Trump will follow through on his promise to dismantle this controversial program once he assumes office.
Just as he ended the original Operation Choke Point during his first term, there is optimism that Trump will take decisive action to protect the interests of the crypto industry and ensure a fair and transparent regulatory environment.