As Trump gears up for a potential second term in office, the debate surrounding Operation Choke Point 2.0 has reignited. Crypto businesses, which have long been targeted by this controversial program, along with industry observers, are optimistic that Trump will take bold steps to abolish it. But what exactly is Operation Choke Point 2.0, and why do many in the crypto sector want Trump to put an end to it?
Operation Choke Point 2.0 is an alleged program launched by the Biden administration and a group of US regulators to restrict the crypto industry’s access to the banking system. Seen as a successor to the original Operation Choke Point initiated under the Obama administration in 2013 and terminated by Trump in 2017, these initiatives aim to investigate banks’ ties to high-risk industries to combat fraud and money laundering. Regulatory pressure is the primary tool used to target disfavored sectors, with Operation Choke Point 2.0 reportedly pressuring banks to sever connections with crypto businesses.
While the current administration denies the existence of Operation Choke Point 2.0, critics argue that enforcement actions by financial regulators such as the SEC, FDIC, and OCC have confirmed ongoing operations. These agencies are believed to have discouraged banks from offering services to crypto firms, as evidenced by warnings issued to banks about crypto asset risks. The crypto industry witnessed a notable impact as Silvergate Bank and Signature Bank, key players in the crypto banking sphere, faced turmoil and restrictions on transactions.
Furthermore, more evidence of Operation Choke Point 2.0’s existence emerged as banks with ties to the crypto industry faced increased pressure to limit their services. The Fed’s recent order for Customers Bank to notify regulators of new crypto-related services as part of an enforcement action highlighted ongoing debanking efforts. Industry figures, including Coinbase’s Chief Legal Officer Paul Grewal and Gemini’s Tyler Winklevoss, have spoken out against the crackdown, citing proof of Operation Choke Point 2.0 in action.
Trump’s stance on Operation Choke Point 2.0 remains clear, with a promise to end the program if re-elected. He has vowed to shut down the initiative, which he believes aims to choke businesses out of existence, and to remove key figures like SEC Chair Gary Gensler. With Gensler and FDIC Chairman Martin Gruenberg set to depart soon, there is anticipation that Trump will follow through on his pledge to dismantle Operation Choke Point 2.0, as he did with the original program during his first term.
In conclusion, the discussion around Operation Choke Point 2.0 continues to spark controversy within the crypto industry and among observers. While the Biden administration denies its existence, evidence of regulatory pressure and restrictions on banking services for crypto businesses suggest otherwise. With Trump’s promise to end the program if re-elected and the imminent departure of key officials associated with the initiative, the industry remains hopeful for a resolution that will support and enable the growth of the crypto sector.
