Crypto leaders call out White House for claiming ‘Chokepoint 2.0’ isn’t real

According to FOX Business, several representatives of the crypto industry met with White House officials on Thursday morning in an attempt to mend relations between the emerging fintech sector and the US Democratic Party.

The meeting became tense as the government denied industry claims that there was a coordinated effort to cut crypto companies out of the banking system, a conspiracy widely known as “Operation Chokepoint 2.0.”

Crypto Banking Issues

As reported on Thursday, Treasury Assistant Secretary Wally Adeyemo told cryptocurrency attendees that regulators were not actively trying to cut crypto from the financial system.

In response, one of the crypto executives in attendance called for a show of hands for crypto companies that have been denied banking access due to White House policies. Almost everyone in the industry raised their hands — a group that includes Mark Cuban, Anthony Scaramucci, along with representatives from Coinbase, Kraken, Uniswap and other companies.

“Executives didn’t shy away from telling administration representatives how much damage they’ve done to the crypto industry and the Democratic Party with their actions against digital assets,” an aide said, according to FOX. “They basically just yelled at them.”

Crypto banking problems go back years, starting in earnest after the collapse of FTX, which triggered regulatory action against blockchain companies.

Nic Carter, a partner at Castle Island Ventures, published a blog post in February titled “Operation Choke Point 2.0 is underway” detailing some of these earlier efforts. One such action included guidance from the OCC, the FDIC and the Federal Reserve to discourage banks from servicing crypto companies.

Barely a month later, crypto-friendly banks including Silvergate Bank, Signature Bank and Silicon Valley Bank were forced to close their doors. The coincidental downfall of the three companies, which sent crypto companies fighting for banking lifelines overseas, was interpreted by the bank’s own leaders as sending a strong “anti-crypto message.”

“The Harris administration turntables are trying to pretend there aren’t systematic ousters; meanwhile, all the crypto reps on the call say they haven’t been bankrolled. The reset is going great!” Nic Carter said in response to the news.

Will the Democrats come to crypto?

Despite the tensions at Thursday’s meeting, some crypto moguls are optimistic that the Harris administration is at least trying to engage productively with them.

“My colleagues in the crypto space want action now, but that’s not how things work in Washington,” said Anthony Scaramucci, founder of SkyBridge Capital. “I think we’re making steady progress.”

Coinbase CLO also came out hopeful, calling Kamala Harris the “perfect candidate to be a strong new face for crypto and break with the past.”

Still, many remain skeptical that the administration’s friendly gestures will translate into appropriate policy action. Gemini co-founder Tyler Winklevoss, for example, asked why Harris herself hadn’t appeared at the virtual roundtable.

Doubt grew further Thursday with the revelation that Customers Bancorp had been hit by an enforcement action from the Federal Reserve, which now requires the bank to give the Fed 30 days’ notice before entering into any new relationship. with a digital asset company.

“The Fed confirmed that Operation Choke Point 2.0 is still in full swing, provided valuable insight into how it works, and verified that Harris’ crypto ‘reset’ is a scam,” Winklevoss said.

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