Key Takeaways
- Operation Chokepoint 2.0 is a conspiracy that alleges regulators and major financial institutions colluded to suppress the cryptocurrency industry through debanking and other methods.
- The Federal Reserve denied financial institutions tied to crypto or cannabis access to its “master accounts.”
- Four of America’s biggest bans account for around half of all debanking complaints.
A conspiracy to prevent financial institutions from engaging with the cryptocurrency industry known as “Operation Chokepoint 2.0” appears to be more fact than fiction as a gigantic trove of damning documents reveals all.
Operation Chokepoint 2.0
Ahead of the U.S. Senate Banking Committee’s Feb. 5, 2025, hearing on debanking, the acting Chairman of the Federal Deposit Insurance Corporation (FDIC), Travis Hill, released 175 documents signaling that, indeed, the anti-crypto conspiracy Operation Chokepoint 2.0 is real.
Notably, 25 “pause” letters were sent in 2022, heavily advising banks and financial institutions under FDIC supervision to cease “all crypto asset-related activity.” As per the FDIC, documents released today reveal these requests were “almost universally met with resistance.”
The banks wanted to work with crypto, but the FDIC refused to budge or even engage, meeting requests for information with months of silence. That, or follow up with directives to “pause, suspend, or refrain” from expanding blockchain and crypto activities.
During the hearing, Old Glory Bank CEO Mike Ring claimed that regulatory agencies coordinated in launching notices that suppressed crypto engagement.
He is referring to the FDIC’s FIL-16-2022 and the SAB-121 accounting rule from the U.S. Securities and Exchange Commission (SEC), both of which served to “choke out” banks acting as crypto custodians.
He notes it’s unlikely that both of these directives being published in April 2022 is a coincidence.
The Fed
One of the more troubling revelations is that the Federal Reserve seems to have also played a role in Operation Chokepoint 2.0, as a page from its internal handbook has guidelines on how to review applications for “master accounts,” which plug institutions directly into the Fed’s systems and services.
These accounts are vital for business. Think of the master account as a bank account with the Fed. It’s one of the few places a big institution can store money with 100% fiat backing. It also streamlined operations and allows financial institutions to process, settle, and handle transactions without relying on another bank.
The Fed was able to exercise dominion over emerging sectors such as cannabis and crypto by denying these accounts, especially to new banks who would work with such industries. The Fed has denied accusations of discrimination. As per a statement from Senate Banking Committee Chairman Tim Scott:
“This issue should concern every American, regardless of political affiliation and that’s why I am committed a bipartisan solution to stop this form of discrimination. This hearing is just the beginning.”
American Debanking
It’s not just crypto that got hit. The emerging phenomenon of debanking citizens because of the nature of their legal business, political or religious creed, or other affiliations is a big issue in America.
During the hearing, Senator Elizabeth Warren noted in her opening remarks that Donald Trump was “on to a real problem” when he called out the Bank of America for debanking at Davos.
In fact, her staff discovered that the other three big banks, Citibank, JP Morgan, and Wells Fargo, also accounted for half of all debanking complaints made to the Consumer Financial Protection Bureau.
Whilst governments and regulators have a responsibility to maintain secure guardrails to protect consumers and financial institutions from unwittingly backing/providing financial services to malicious actors, these recent findings suggest a dubious amount of foul play.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
