The Coinbase team announced on Friday that it has received unredacted Operation Choke Point 2.0 letters from the Federal Deposit Insurance Corporation (FDIC). This development follows a court order instructing the FDIC to release the complete documents.
A Glimpse Into Operation Choke Point’s History
The term “Operation Choke Point 2.0” gained traction after Marc Andreessen, co-founder of Andreessen Horowitz, used it during his appearance on the Joe Rogan Podcast. Andreessen accused the Biden administration of using financial exclusion as a regulatory tool, echoing a controversial Obama-era program known as Operation Choke Point.
The original Operation Choke Point targeted industries deemed high-risk, such as firearms and marijuana businesses, by limiting their access to financial services. These practices were criticized as regulatory overreach, and now, its modern iteration appears to focus on cryptocurrency activities.
What the Letters Reveal
The unredacted letters from the FDIC provide detailed insights into how financial institutions were steered away from engaging with cryptocurrencies. Key findings include:
- Volume of Communication: Between 2022 and 2023, the FDIC issued 25 letters to various banks.
- Anti-Crypto Messaging: A recurring theme in the letters urged banks to pause or limit cryptocurrency-related activities indefinitely.
- Scope of Restrictions:
- Prohibited basic buying and selling of cryptocurrencies like Bitcoin and Ethereum.
- Restricted more complex offerings, including Bitcoin-backed loans and stablecoin-related services.
- Disallowed banks from holding crypto assets or non-fungible tokens (NFTs).
These revelations indicate an orchestrated effort to stifle the growth of cryptocurrency within traditional financial systems.
Legal Experts Join the Fight
Former U.S. prosecutor John Deaton has stepped forward to lead a potential probe into Operation Choke Point 2.0. Deaton, a known advocate for cryptocurrency, offered to investigate the FDIC’s actions pro bono. He claims the issue extends beyond digital assets and could reflect broader regulatory manipulation of financial infrastructures.
Deaton’s stance raises critical questions: Is the FDIC choosing winners and losers by controlling access to financial tools? If so, what does this mean for innovation and fair competition in the financial sector?
Political Silence Amid Growing Tensions
Interestingly, there has been no official comment from former President Donald Trump’s team on the issue, despite his public support for making the U.S. a global leader in cryptocurrency. The silence leaves room for speculation about how the debate will evolve as regulatory scrutiny over digital assets intensifies.
What’s Next?
As Coinbase and other industry players digest the contents of the unredacted letters, the crypto community is likely to demand accountability from regulators. Whether through Deaton’s proposed investigation or further legal challenges, the fight over financial freedom in the crypto space is far from over.
