According to Caitlin Long, Operation Chokepoint 2.0 is real but is stifling the United States. The crypto industry will bring other problems down the line.
The founder of crypto-friendly Custodia Bank, Caitlin Long, said regulators would “be playing Whack-a-Mole” with problems if they continued to suppress Bitcoin (BTC).
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War on Crypto
Recent regulatory enforcement actions have sparked concerns about a planned attack on the United States. crypto industry. The SEC most recently served Coinbase with a Wells Notice on March 22.
Bitcoin bull Anthony Pompliano described “Operation Chokepoint 2.0” as a program that bypasses laws and democratic due process to enforce political views. He admitted that no one in authority had acknowledged the existence of such a program, and he didn’t hold out hope that they would.
“It alludes to an Obama-era initiative that employed the banking system as a way to enact political ideas or laws without going through the formal legislative process.”
Former Federal Deposit Insurance Corporation (Operation Chokepoint (1.0) was not about preventing fraud and safeguarding consumers, according to William Isaac, the former FDIC chair who served from 1981 to 1985. Instead, it was a proxy attack on industries “deemed undesirable.”
“by applying regulatory pressure to the banks that serve them, to target entire sectors that are deemed undesirable.”
Nic Carter, a partner at Castle Island Ventures, made the initial connection. He said “a new Operation Choke Point type operation” has been in force since the start of 2023 — adding that it is a deliberate attempt to stifle the crypto industry.
“The industry is being isolated and its connection to the banking system is being cut off in a well-planned effort, and it is succeeding.”
Custodia Gets Rejected
On January 27, the Federal Reserve System rejected Custodia Bank’s application to join. Later that day, the Kansas City Fed rejected Custodia’s request for a master account.
A master account provides direct access to the Fed’s wholesale payment network, eliminating the need for a bank to serve as a middleman.
Speaking to Pompliano, Long said before the rejections, Custodia was told to withdraw its applications or they would be “voted down.” Likewise, according to Long, the quick succession of the two rejections is proof of coordination.
Furthermore, since then, she pointed out the crypto industry has had a “blanketing” of enforcement actions — making it clear that There is a true Operation Chokepoint 2.0.
“We’ve seen it with actions against Paxos, actions against stablecoin issuers, actions against Kraken between the IRS and SEC, and the majority of cryptocurrency exchanges received Wells Notices in early February.
Regulators Can’t Stop Bitcoin
Responding to Bitcoin “fixing this,” Long claimed that despite the harm already done, recent increases in the price of BTC show that the government is powerless to stop it.
According to her, regulators and those promoting an anti-crypto agenda are refusing to acknowledge that they will lose control of this. Instead of embracing change, they try to keep people stuck “on old technology.”
Fiat and cryptocurrency will coexist, but by requiring the U.S. crypto firms overseas, regulators are storing up problems for themselves in the long term, Long said.
“The sad part is that by moving everything offshore, they will be playing Whack-a-Mole and, quite frankly, they will be exposed to risks they were unaware of, most likely through correspondent banks.”
