Fed escalates Operation Chokepoint 2.0 crackdown against crypto – Winklevoss Fed escalates Operation Chokepoint 2.0 crackdown against crypto – Winklevoss
Gemini's Winklevoss warns of harsher Fed actions if Vice President Kamala Harris wins November election.
2 min read
Updated: Aug. 9, 2024 at 2:23 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Gemini co-founder Tyler Winklevoss believes that Operation Chokepoint 2.0 “is alive and well” following the US Federal Reserve’s latest regulatory action against the crypto-friendly Customers Bank.
The Fed’s regulatory move follows concerns that the bank violated the Bank Secrecy Act, Anti-Money Laundering laws, and Office of Foreign Assets Control (OFAC) regulations due to its involvement with digital assets.
Due to this, the financial regulator mandated Customers Bank to enhance its oversight, risk management, and compliance measures within 60 days. This includes improving its board oversight, BSA/AML compliance, and OFAC adherence.
Additionally, the bank must notify the Fed of any new initiatives or products 30 days before implementation.
Operation Chokepoint 2.0
Over the past year, crypto stakeholders have decried Operation Chokepoint 2.0 as a policy of President Biden’s administration designed to emasculate the industry. While the Federal Reserve maintains its independence, the Biden administration has significant jurisdiction and influence over OFAC and the SEC.
Winklevoss argued that the Fed’s latest enforcement action reveals how Operation Chokepoint 2.0 functions. He explained:
“The punchline of this enforcement action is that Customers Bank must now give the Fed 30 days of advance notice prior to entering into any new banking relationship with a crypto company.”
According to Winklevoss, this action centralizes decision-making, placing the Fed as a direct gatekeeper for crypto companies seeking new bank accounts.
He stated that a principles-based regulation would allow individual banks to decide whether to bank a company. Instead, the Fed has centralized this decision-making process, removing discretion from individual banks.
Winklevoss warned that the situation could worsen if Vice President Kamala Harris wins the upcoming election and Elizabeth Warren remains a Senator. He said the current regulatory measures are merely a prelude to harsher actions. He added:
“This enforcement action is the Fed playing nice with nerf guns. It’s just the table setting. Not even the appetizer. The Fed is on its best behavior at the moment because the election is around the corner. If Harris wins in November, the gloves will come off.”
Conclusively, he warned that the Biden-Harris administration’s anti-crypto policies could severely damage the industry if they persist for another four years.
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Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Gemini
Gemini is a regulated digital asset exchange and custodian that allows customers to buy, sell, store, and stake digital assets in a regulated, secure, and compliant manner.
Elizabeth Warren is an American politician and former academic known for being fiercely anti-Bitcoin and anti-crypto.
Tyler Winklevoss, known for his pioneering role in the cryptocurrency realm, is a Harvard University alumnus with a degree in Economics and holds an MBA from Oxford University.
Kamala Devi Harris (born October 20, 1964) is an American politician and attorney serving as the 49th Vice President of the United States.
Joe Biden, byname of Joseph Robinette Biden Jr., is an American politician and the 46th and current president of the United States.