Tyler Winklevoss criticizes the Fed’s crackdown on Customers Bank News ▸ US ▸ Regulation
Tyler Winklevoss criticizes the Fed’s crackdown on Customers Bank
Tyler Winklevoss believes that the Fed’s enforcement action proves Operation Choke Point 2.0 is “in full swing” and warns of worse to come if Harris wins in November.
2 min read
Updated: Aug. 10, 2024 at 11:20 pm UTC
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Crypto exchange Gemini co-founder Tyler Winklevoss called the “reset” of the crypto stance of Vice President Kamala Harris a “scam” in an X post on Friday, amid the Federal Reserve’s crackdown. Winklevoss’ post comes a day after he slammed Harris for not attending the roundtable discussion with crypto leaders on Aug 8.
In the post, Winklevoss highlighted and criticized the U.S. Federal Reserve’s enforcement action against Customers Bank, a crypto-friendly bank. The Federal Reserve issued a 13-page enforcement action against Customers Bank on Friday.
According to the enforcement action, Customers Bank must give the Federal Reserve thirty days of written notice before entering into a new banking relationship with crypto firms.
Winklevoss wrote:
“Today, the Fed confirmed that Operation Choke Point 2.0 remains in full swing, provided valuable insight into how it works, and verified that the Harris crypto “reset” is a scam.”
Since Customers Bank is one of the only crypto-friendly banks in the U.S., Winklevoss believes that the enforcement action would essentially create a choke point. This is because the enforcement action makes the Federal Reserve a “direct gatekeeper standing between crypto companies and their ability to get a new bank account.”
Winklevoss argued that, “This is not how principles-based regulation is supposed to work.” According to him, banks should have the autonomy to decide who they serve. The decision should be “decentralized across the entire banking industry,” he wrote.
He added:
“Now, this decision has been centralized by the Fed and will be made by the Fed at its sole discretion. The Choke Point has been created.”
Allegations made without proof, says Winklevoss
According to the enforcement action, the Federal Reserve “identified significant deficiencies related to the Bank’s risk management practices and compliance with the applicable laws, rules, and regulations relating to anti-money laundering (AML).”
However, Winklevoss called the accusations “non-allegation allegations” that are “hand-wavy and vague.” According to him, it is “entirely unclear” why the Federal Reserve brought the enforcement action against Customers Bank.
Winklevoss further claimed that the Federal Reserve’s allegations were not backed up by proof. He wrote:
“Not a single fact or tangible finding, however, is provided to back up this claim. The public must take the Fed’s words for it. Trust us they say. How convenient.”
Furthermore, Winklevoss believes that the Federal Reserve has a sinister motive behind bringing the enforcement action. According to him, the Federal Reserve’s “real concern and purpose” is to build a public case and ultimately gain control over Customers Bank’s decision-making process.
He wrote:
“[The ultimate goal is] the unlawful control of what companies and industries a bank can bank, and what companies and industries it cannot.”
Winklevoss went on to warn that the enforcement action is the Federal Reserve “playing nice.” If Harris wins the election in November, “the gloves will come off,” he wrote.
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Monika Ghosh
In 2020, Monika immersed herself in crypto, maintaining skepticism yet firmly believing blockchain could address key issues like financial disparity and transparency. A book-lover, she's also a passionate food enthusiast.
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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.