Prominent Figures Warn of Increased Coordinated Effort Against Crypto Industry
Prominent figures within the crypto community are raising alarms over what appears to be a new wave coordinated effort by US banks to systematically dissociate from businesses dealing in digital currencies. Operation Choke Point 2.0, initiated last year, is a concerted government effort involving the Biden White House, various agencies, the Federal Reserve, and influential members of Congress that aims to restrict the fiat access of crypto, potentially suffocating the industry.
Founder’s Ordeal with Wells Fargo
The recent outcry began when John Paller, the founder and Executive Steward of ETHDenver and Opolis, shared his experience with Wells Fargo on social media. Paller disclosed that after 26 years of being a customer, Wells Fargo abruptly terminated all of his accounts, including personal, business, and non-profit, without providing a clear explanation.
- Paller’s long-standing relationship with the bank, involving millions in fees over the years, was abruptly severed, leaving him puzzled about the rationale behind the bank’s decision.
- He suspects that the closure was due to his involvement with Opolis accounts, which were also shut down last year because of their crypto association.
Industry-Wide Phenomenon Confirmed
Gabor Gurbacs, the founder of PointsVille and an advisor to Tether and VanEck, backed Paller’s claims, confirming a broader industry trend of de-platforming businesses associated with crypto. According to Gurbacs, this phenomenon marks the return of Operation Choke Point 2.0, suggesting a systemic attack on the cryptocurrency sector.
- Gurbacs highlighted that banks are quietly de-platforming businesses, even services, connected to crypto, hinting at a coordinated effort against the industry.
Crypto Businesses Seek Support
Caitlin Long, CEO of Custodia Bank, who aims to bridge cryptocurrencies with traditional banking, reported an increase in inquiries from crypto companies that were displaced by their banks. Long noted a surge in interest from these companies seeking to replace their closed bank accounts, indicating a broader issue of financial exclusion faced by the crypto industry.
- Long emphasized that there is a witch hunt underway to debank fintech and crypto companies in the US, marking it as a political move with potential legal violations.
Legal Battle for Banking Equality
Custodia Bank’s fight for a Federal Reserve master account, which is essential for banking autonomy from intermediaries, faced a setback when a federal judge ruled against granting Custodia access to the system. The decision was met with criticism from industry experts and politicians, who saw it as a hindrance to crypto’s integration within the traditional financial system.
- The rejection of Custodia’s application was seen as arbitrarily motivated and raised concerns about the legality of the decision, potentially influenced by political pressure.
- Experts like Anthony Scaramucci and former Senator Pat Toomey criticized the decision, calling it contradictory and inconsistent with prior judgments.
Bitcoin Market Update
At the time of writing, Bitcoin was trading at $66,771.
Hot Take: Uphill Battle for Crypto Industry
The challenges faced by crypto businesses in accessing banking services highlight a concerning trend of discrimination and exclusion. With the industry under scrutiny and facing regulatory hurdles, it is crucial for stakeholders to advocate for fair treatment and address the systemic issues affecting crypto adoption and growth.
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