The Impact of Operation Chokepoint 2.0 on the Crypto Industry

The recent regulatory action taken by the US Federal Reserve against the crypto-friendly Customers Bank has raised concerns within the crypto industry. The Fed cited violations of the Bank Secrecy Act, Anti-Money Laundering laws, and Office of Foreign Assets Control regulations due to the bank’s involvement with digital assets. Customers Bank has been mandated to enhance its oversight, risk management, and compliance measures within 60 days.

Tyler Winklevoss, co-founder of Gemini, has voiced his opinion on the matter, stating that Operation Chokepoint 2.0 is “alive and well.” He believes that the Fed’s latest enforcement action centralizes decision-making by requiring Customers Bank to give 30 days advance notice before entering into any new banking relationship with a crypto company. Winklevoss argues that this removes discretion from individual banks and places the Fed as a direct gatekeeper for crypto companies seeking new bank accounts.

Winklevoss warns that if Vice President Kamala Harris wins the upcoming election and Elizabeth Warren remains a Senator, the regulatory measures could escalate. He views the current enforcement action as merely a prelude to harsher actions that could significantly damage the crypto industry. Winklevoss suggests that the Biden-Harris administration’s anti-crypto policies may worsen if they persist for another four years.

Crypto stakeholders have decried Operation Chokepoint 2.0 as a policy aimed at restricting the growth of the industry. The centralization of decision-making and increased regulatory oversight have raised concerns about the future of crypto-friendly banking relationships. The industry is closely monitoring the situation and preparing for potential challenges that may arise as a result of the regulatory actions taken by the Federal Reserve.

The impact of Operation Chokepoint 2.0 on the crypto industry cannot be understated. The recent regulatory action against Customers Bank highlights the challenges faced by crypto companies in navigating the evolving regulatory landscape. As stakeholders continue to engage with regulators and policymakers, the future of the industry remains uncertain. It is essential for industry players to stay informed and proactive in addressing potential regulatory obstacles to ensure the continued growth and innovation of the crypto sector.