US Banking Regulators Target the Crypto Business with Operation Chokepoint 2.0
According to a recent white paper released by four members of Cooper&Kirk Law Firm, US banking regulators are reportedly attempting to \”drive crypto business out of the financial s
According to a recent white paper released by four members of Cooper&Kirk Law Firm, US banking regulators are reportedly attempting to “drive crypto business out of the financial system.”. This paper, entitled “Operation Chokepoint 2.0”, points out that U.S. banking regulators are ostensibly waging a “secret financial war” against the encryption industry. After laying the foundation for labeling legitimate companies as “reputational risk,” federal banking regulators, with the help of state officials, “have shifted to the task of clearing accounts from every bank they supervise.”.
Law Firm Paper: US banking regulators are waging a “secret financial war” against the encryption industry
Introduction
Recently, a white paper released by four members of Cooper&Kirk Law Firm claimed that U.S. banking regulators are secretly waging a financial war against the crypto industry. The paper, entitled “Operation Chokepoint 2.0,” reports that federal banking regulators are trying to drive crypto businesses out of the financial system by labeling them as “reputational risks.” This article will delve into the details of this alleged war and its impact on the crypto industry.
The Origins of Operation Chokepoint
The original Operation Chokepoint targeted payday lenders, gun dealers, and other businesses considered to be at high risk of fraud. In this operation, the Department of Justice (DOJ) and the Federal Deposit Insurance Corporation (FDIC) forced banks to terminate the accounts of these businesses, citing reputational risks. The controversy surrounding the operation led to its discontinuation in 2017.
The Alleged Secret War Against Crypto
According to the white paper mentioned earlier, federal banking regulators have restarted Operation Chokepoint in a new form to target the encryption industry. The paper details how regulators have labeled legitimate crypto companies as reputational risks, which has led to their accounts being cleared from every bank they supervise.
The Impact of Operation Chokepoint 2.0
The impact of Operation Chokepoint 2.0 on the crypto industry has been significant. In response to this regulatory pressure, many banks have stopped providing services to crypto companies. As a result, these companies are forced to resort to other means to conduct their business. This creates a difficult situation for companies trying to operate in compliance with regulatory requirements.
The Legal Response from Crypto Companies
In response to Operation Chokepoint 2.0, some crypto companies have filed lawsuits. One such lawsuit was filed by the blockchain payment company, Intermex, claiming that it was wrongfully terminated from its bank account because of its association with the crypto industry. Other companies have joined together to form the Blockchain Association to fight back against regulatory actions that they deem to be unfair.
The Future of Crypto Regulation
Operation Chokepoint 2.0 highlights the ongoing struggle between financial regulators and the crypto industry. It raises questions about the future of crypto regulation and the role of governmental bodies in shaping the development of the industry. One thing is certain: the crypto industry will continue to face regulatory hurdles as it seeks to establish itself as a legitimate player in the financial system.
Conclusion
Operation Chokepoint 2.0 represents a significant challenge for the crypto industry, as U.S. banking regulators target and label legitimate companies as reputational risks. This regulatory pressure has forced crypto companies to seek other means to operate their businesses, creating a difficult situation for them. It raises important questions about the future of regulatory oversight in the industry and the role of government in shaping its development.
FAQs:
Q: What is Operation Chokepoint?
A: Operation Chokepoint was a previous operation that targeted payday lenders, gun dealers and other high-risk businesses.
Q: How has Operation Chokepoint 2.0 impacted the crypto industry?
A: Many banks have stopped providing services to crypto companies, forcing them to resort to other means to conduct their business.
Q: How have crypto companies responded to Operation Chokepoint 2.0?
A: Some companies have filed lawsuits, while others have formed the Blockchain Association to fight against what they see as unfair regulatory actions.
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