A federal initiative that began during the Obama administration with the goal of debanking certain industries disfavored by federal officials has apparently been resurrected and is taking aim at cryptocurrencies.
Operation Choke Point was started by the U.S. Dept. of Justice in 2013 as a way to put pressure on banks to sever their ties, without due process, with legal businesses like gun dealers, cannabis dispensaries and payday lenders which the administration found objectionable.
That initiative was ended by President Trump in 2017 but under the Biden administration, it appears that Operation Choke Point 2.0 has begun with the Federal Deposit Insurance Corporation (FDIC) sending letters to U.S. banks in 2022, urging them to “pause all crypto-related activity.”
Senator Cynthia Lummis (R-WY) told Fox Business that the regulatory abuse is real and that President-elect Trump will put an end to this type of regulatory abuse.
Venture capitalist Marc Andreessen recently described the practice of debanking as “a privatized sanctions regime” on The Joe Rogan Experience, saying, “There’s no rules, there’s no court, there’s no decision process, there’s no appeal. Who do you go to to get your bank account back?”
And if the tune of Operation Choke Point 2.0 sounds familiar, there are also familiar faces as well.
Palmetto State News reports that Michael Eakes is the founder of the Center for Responsible Lending (CRL) and Self-Help Credit Union, which operates five credit unions in South Carolina and was also an inaugural member of the FDIC’s Advisory Committee on Economic Inclusion when it was started in 2006.
Another member of the advisory committee is Michael Calhoun who is president of the Center for Responsible Lending and a former employee of Self-Help Credit Union.
According to the Washington Free Beacon:
“The FDIC’s efforts are part of a larger initiative involving the Department of Justice and the Consumer Financial Protection Bureau called Operation Choke Point. The effort seeks to eliminate the ability of businesses that federal regulators deem distasteful, exploitative, or dangerous to obtain financing from major American banks.”
Former FDIC Chairman William Isaac told The Hill that Operation Choke Point, “is one of the most dangerous programs I have experienced in my 45 years of service as a bank regulator, bank attorney and consultant, and bank board member.”
A lawsuit filed by Coinbase uncovered letters sent by the FDIC in 2022 and 2023 urging financial institutions to “pause” crypto-related activities has revealed that Operation Choke Point 2.0 is being used to sidestep constitutional limits on the government’s power to exert direct political control over the crypto sector.
Sourced from ZeroHedge
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