The cryptocurrency world is buzzing with controversy following the release of documents suggesting the Biden administration directed banks to disengage from cryptocurrency-related business. These documents appear to validate long-held suspicions of a program informally dubbed "Operation Chokepoint 2.0," aimed at restricting the industry's access to traditional banking services.
Chris Lane, former CTO of Silvergate Bank, directly blamed federal regulators for the bank's downfall in the wake of these revelations. He asserted that Silvergate's focus on cryptocurrency clients, a strategic move initiated in 2013, became its Achilles' heel when regulators imposed severe limitations on the bank's capacity to hold U.S. dollar deposits for digital asset clients. This, Lane argued, effectively dismantled their entire business model, likening the experience to being "shot in the back."
The release of these documents ignited a firestorm within the cryptocurrency community. David Sacks, President-elect Trump's newly appointed czar for artificial intelligence and cryptocurrency, emphasized the urgency of investigating the numerous accounts of individuals allegedly harmed by "Operation Chokepoint 2.0."
Paul Grewal, chief legal officer at Coinbase, a major cryptocurrency exchange, shared the documents obtained through Freedom of Information Act requests, coinciding with an ongoing legal dispute between Coinbase and both the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC). The documents reveal the FDIC's instructions to banks to halt all crypto-related activities.
Grewal condemned the government interference, asserting that legitimate businesses should have unfettered access to banking services. He expressed hope that the incoming administration would rectify these "politically motivated regulatory decisions" and pledged to continue pursuing unredacted versions of the documents.
The issue gained further attention when tech investor Marc Andreessen claimed on Joe Rogan's podcast that over 30 tech founders were denied banking services for political reasons. He drew parallels to the Obama-era "Operation Chokepoint," which targeted industries deemed high-risk, such as payday lenders and gun dealers. This has fueled concerns about a potential resurgence of similar tactics against the cryptocurrency sector.
Fox News Digital contacted both the FDIC and SEC for comment but did not receive a response before publication.
