According to a recent white paper published by four members of the law firm Cooper & Kirk, PLLC, US banking regulators are trying to “drive cryptocurrency companies out of the financial system.” The document, titled “Operation Chokepoint 2.0,” claims that after laying the groundwork by labeling legal business “reputational risk,” federal banking regulators, with the help of state officials, “set out to purge their accounts from each of the banks subject to their supervision.”
Constitutional Issues Raised by Operation Chokepoint 2.0: Depriving Businesses of Due Process and Key Structural Constitutional Protections
Five days ago, Bitcoin.com News published an article examining recent discussions in the crypto community regarding “Operation Chokepoint” and why cryptocurrency advocates believe the US government is aiming to remove access. to cryptocurrencies. On Monday, the Washington DC law firm Cooper & Kirk released a White paper on the subject, noting that US banking regulators are apparently waging an “underground financial war” against the crypto industry.
The article’s authors, David Thompson, John Ohlendorf, Harold Reeves and Joseph Masterman, begin by explaining “Operation Chokepoint 1.0” before delving into “Operation Chokepoint 2.0.” The first iteration of the alleged operation began by labeling legal and law-abiding crypto entities as “reputational risky.”
The second stage of the operation attempts to stifle the crypto industry by restricting access to on-ramps and off-ramps. According to the Cooper & Kirk article, “in the back rooms of banks across the country, bank examiners explained that those financial institutions that continued to serve customers labeled ‘reputationally risky’ by federal regulators would suffer the consequences.” ”.
The law firm explains that one of the first acts committed was when the Biden administration’s Office of the Comptroller of the Currency (OCC) rescinded a rule designed to “ensure fair access to banking services for various industries, including debt collection, previously cut off during the controversial Obama-era Operation Chokepoint program.
The Cooper & Kirk authors further detail that the Federal Deposit Insurance Corporation (FDIC) became involved on April 7, 2022. At that time, the FDIC sent a letter to all institutions under its supervision. , requesting information about your interest in providing services to cryptocurrencies. industry and banks that are already engaged in businesses of this nature. The Cooper & Kirk white paper states that Operation Chokepoint 2.0 is illegal and unconstitutional.
“Operation Choke Point 2.0 deprives companies of their constitutional rights to due process in violation of the Fifth Amendment,” the authors of the article explain. “Operation Choke Point 2.0 violates both the non-delegation doctrine and the anti-command doctrine, depriving Americans of key structural constitutional protections against the arbitrary exercise of governmental power.”
The white paper follows the bankruptcies of three major US banks that had connections to the crypto industry, as well as comments from Signature Bank board member and former politician Barney Frank, who suggested the Signature seizure was meant to be an “anti-crypto” message. .
What do you think of the allegations made in the Cooper & Kirk white paper? Do you think Operation Chokepoint 2.0 is unconstitutional, and if so, what actions should be taken to protect the rights of crypto companies? Share your thoughts in the comments section below.
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