NewsletterTrump’s Crypto Czar David Sacks to Investigate Operation Choke Point 2.0
Highlights
- Crypto czar David Sacks takes notice of anti-crypto regulatory campaign called Operation Choke Point 2.0.
- Silvergate Bank's CTO Chris Lane explains how regulators, and not FTX collapse, pushed the bank into bankruptcy.
- Coinbase has released 23 heavily redacted "pause letters" from the FDIC exposing the agency..
- Congressional members like Rep. French Hill have called for an investigation into the operation.
David Sacks, the newly appointed crypto czar has taken notice of the surge in complaints about Operation Choke Point 2.0. Following the Donald Trump victory discussions regarding this operation, which involved attempts to cripple the crypto industry by preventing access to liquidity, have been on the rise. On Friday, crypto exchange Coinbase unveiled the “pause letters,” revealing the Federal Deposit Insurance Corporation’s (FDIC) role in Operation Choke Point 2.0.
David Sacks to ‘Look Into’ Operation Choke Point 2.0
As Operation Choke Point 2.0 enters mainstream discussion, Trump’s newly appointed crypto czar David Sacks has stepped into the matter. In a message on the X platform, Sacks wrote:
“There are too many stories of people being hurt by Operation Choke Point 2.0. It needs to be looked at”.
His comments came as a response to Silvergate Bank CTO Chris Lane, who explained how the regulators choked the bank into bankruptcy. Remembering the collapse of the crypto exchange FTX in November 2022, Lane wrote: “When FTX went down, Silvergate survived a 70% run on deposits. A typical bank cannot survive 20%. FTX didn’t kill us; our regulators did.”
Following David Sacks’s involvement, crypto industry veterans have offered their help in investigating the matter. The crypto industry has very high hopes from Sacks and his team and expects him to change all the unjust practices during the Biden administration.
Coinbase Releases FDIC “Pause Letters,” Files Motion
Coinbase has made public 23 heavily redacted “pause letters” it received from the Federal Deposit Insurance Corporation (FDIC), shedding light on documents tied to what the crypto industry refers to as “Operation Chokepoint 2.0.” In a legal escalation, Coinbase filed a court motion today seeking unredacted versions of these letters.
Earlier this week, during a hearing held by the House Financial Services Committee, Rep. French Hill asserted that the next Congress has the authority to “halt, reverse, and investigate Operation Chokepoint 2.0.”
With a GOP trifecta next year, we will be able to halt, reverse, and investigate Operation Choke Point 2.0.
Legal businesses should have the freedom to bank, and @FinancialCmte will continue to review and investigate @FDICgov’s troubling actions in the 119th Congress. pic.twitter.com/p56mAGFZht
— French Hill (@RepFrenchHill) December 4, 2024
Despite this backlash against US regulators, the Financial Stability Oversight Council (FSOC) continues to push forward its agenda regarding the “concentration risks” associated with the crypto industry. This time, the regulator has targeted stablecoins adding that they pose a major risk to the country’s financial stability. Custodia Bank CEO Caitlin Long lashed out at the FSOC saying that its anti-crypto rhetoric has forced many banks to de-bank crypto issuers.
It will be interesting to see how David Sacks tackles the investigation in Operation Choke Point 2.0. Showing confidence in his capabilities, Coinbase CEO Brian Armstrong wrote: “Sacks is a great pick! It’s incredible to think what is possible with sharp, pro-tech, pro-business people in government”.
All Eyes On Senate Banking Committee
Next Wednesday, the Senate Banking Committee will vote on the renomination of anti-crypto SEC Commissioner Caroline Crenshaw. If confirmed by the Senate, Crenshaw will serve on the commission until 2029. However, in the case of rejection, President-elect Donald Trump will appoint a new candidate.
Crenshaw has been a strong ally of SEC Chair Gary Gensler during her tenure, supporting his regulatory agenda. Notably, she also voted against the approval of spot Bitcoin ETFs.
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