Unveiling Operation Chokepoint 2.0: Evidence of a Coordinated Effort to De-Bank Crypto Companies

The existence of Operation Chokepoint 2.0 has been confirmed. Following the collapse of three major crypto-friendly banks in March 2023, there was indeed a coordinated federal effort to de-bank cryptocurrency companies. The crypto industry, led by prominent figures such as Nic Carter, had long suspected and spoken out against this practice. However, until now, concrete evidence was lacking. On Friday, internal communications from the Federal Deposit Insurance Corp were made public after a research firm hired by Coinbase successfully sued to obtain them. The heavily redacted documents show the banking regulator instructing lenders to halt all activities related to digital assets. In one of the 23 internal letters released by Coinbase, the FDIC wrote, "We respectfully ask that you pause all crypto asset-related activity.") The FDIC and other regulators had previously denied exerting pressure on struggling banks to stop serving crypto companies, many of which were already facing difficulties after the collapse of FTX in late 2022. According to Coinbase Chief Legal Officer Paul Grewal, the letters reveal a concerted plan by the FDIC to deny banking services to a legitimate American industry, which should raise significant concerns. The issue of de-banking has gained attention recently, with prominent figures like Marc Andreessen discussing Operation Chokepoint 2.0 on Joe Rogan's podcast. This week, the House Committee on Financial Services heard testimony from several crypto leaders about the challenges they face in accessing banking services. The redacted letters demonstrate the FDIC's demands for excessive compliance information while failing to provide clear guidelines for banks to follow. Grewal stated that Coinbase will petition the court to release the documents in their entirety. Critics argue that restricting financial services to legal businesses is a violation of fundamental rights and that the federal government should not be able to effectively outlaw legitimate industries. Operation Chokepoint 2.0 draws parallels with an Obama Administration policy aimed at restricting financial services to undesirable businesses, such as payday lenders and gun sellers.