- Newly released documents have revealed a coordinated federal effort to de-bank cryptocurrency companies
- The crypto industry has long suspected such actions, referring to them as “Operation Chokepoint 2.0.”
- These revelations have intensified discussions about the government’s stance on digital assets
US banking institutions actively tried to strangle the crypto sector in 2023, documents recently obtained by Coinbase have revealed. The filings show how federal agencies systematically worked to cut off banking services to cryptocurrency firms, confirming longstanding suspicions within the industry. This initiative, dubbed “Operation Chokepoint 2.0,” appears to mirror earlier efforts aimed at restricting access to financial services for certain sectors.
From Choke to Strangulation
The original Operation Choke Point, initiated during the Obama administration, sought to limit banking services for industries deemed high-risk, such as firearms and payday lending. Critics argued that this program bypassed due process, pressuring financial institutions to sever ties with legally operating businesses.
In recent years, the crypto industry has voiced concerns over a similar campaign targeting digital asset firms. The term “Operation Chokepoint 2.0” was coined to describe alleged efforts by federal agencies to de-bank crypto companies, effectively stifling their operations. These actions reportedly include informal guidance and regulatory pressures on banks to distance themselves from cryptocurrency-related clients.
In June, Coinbase sued the Federal Deposit Insurance Corp (FDIC), seeking the release of documents related to the suggestion that banks were being told to prevent customers from accessing crypto services. Research firm History Associates Inc. obtained the heavily redacted documents, which confirmed the actions of the authorities:
We respectfully ask that you pause all crypto asset-related activity. The FDIC will notify all FDIC-supervised banks at a later date when a determination has been made on the supervisory expectations for engaging in crypto asset-related activity.
Crypto Industry Reacts With Anger
Prominent figures within the crypto community have condemned these practices. Charles Hoskinson, founder of Cardano, remarked that the campaign has “hurt the economy and devastated businesses” by “harassing, fining, auditing, and de-platforming” numerous companies. Nic Carter, a strong critic of Operation Chokepoint 2.0, also commented on its confirmation:
There are too many stories of people being hurt by Operation Choke Point 2.0. It needs to be looked at. https://t.co/IhCdyQfx0g
— David Sacks (@DavidSacks) December 7, 2024
Lawmakers have already called for investigations into the matter, emphasizing the need for transparency and accountability.
As the debate over Operation Chokepoint 2.0 intensifies, the crypto industry is urging clearer regulatory guidelines to ensure fair access to banking services. The unfolding situation underscores the ongoing tension between innovation in digital finance and regulatory oversight.
