key takeaways
- Bitcoin advocate Nic Carter believes that the US government is trying to remove cryptocurrencies from the banking sector.
- Carter claimed that the Biden administration was reviving the Obama-era Operation Choke Point.
- Carter pointed to 14 different events in the last 10 weeks that hinted at a coordinated strategy to deprive the crypto industry of its exit ramps in the United States.
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Cryptocurrency companies may soon be de-banked in the United States, just like online poker was during the Obama era, says Nic Carter.
Operation Choke Point 2.0
Castle Island general partner Nic Carter believes the crypto industry is under attack by the US government.
In a Substack post published Yesterday, Carter claimed that the Biden administration was currently “using the banking sector to stage a sophisticated and widespread crackdown on the cryptocurrency industry” by discouraging banks from doing business with cryptocurrency companies.
According to Carter, the government’s approach replicates a strategy employed by the Obama administration, called Operation Choke Point, which tried to marginalize specific industries by restricting their access to banking. Industries affected included the online poker industry, firearms manufacturers, adult entertainers, lotteries and money transfer networks.
Regarding the cryptocurrency space, Carter listed 14 cases in the last 10 weeks where crypto-friendly banks faced government pressure, or otherwise chose to stop providing services to cryptocurrency companies. He claimed that influential members of Congress, the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Department of Justice were implicated in what he called Operation Choke Point 2.0.
Prominent among these events were statements made by the Federal Reserve, FDIC, OCC, and the National Economic Council that strongly discouraged banks from holding crypto or dealing with crypto customers on a “safe and sound” basis. Also mentioned were the Fed’s rejection of the Custody’s application to become a member of the Federal Reserve, the DOJ’s investigation into Silvergate, and the decision by Signature and Metropolitan Commercial Bank to significantly reduce (or shut down entirely) their crypto services. .
“Over and over again, using the expression ‘safety and soundness,’ [the government has] made it clear that for a bank, touching public blockchains in any way is considered unacceptably risky,” Carter stated, adding that while banks are not explicitly prohibited from servicing crypto customers, “the writing is on the wall.”
Carter’s words were echoed by Blockchain Association attorney Jake Chervinsky, who fixed on Twitter that federal agencies had “weaponized[d] control over the banking system to mandate discrimination against crypto companies.”
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and various other crypto assets.
