US Federal Reserve Accused of Anti-Crypto Moves
A prominent crypto lawyer, James Murphy, has revealed what he believes to be a coordinated effort by US government agencies to crack down on crypto. In addition to the Securities and Exchange Commission (SEC), the Federal Reserve has been implicated in what Murphy calls “Operation Chokepoint 2.0.” The lawyer highlighted the ongoing legal battle between Custodia Bank, a crypto custody firm, and the Feds as evidence of this anti-crypto agenda.
‘Master Account’ Application Denied
Custodia Bank filed a lawsuit against the Federal Reserve after its application for a ‘master account’ was denied. A master account is a bank account that allows financial firms to use the Federal Reserve System for various transactions. Despite meeting the qualifications for a master account, Custodia Bank faced significant delays and uncertainty before ultimately being denied approval.
Operation Chokepoint 2.0 Undermines Crypto Adoption
Operation Chokepoint 2.0 refers to organized attempts by financial bodies to undermine digital asset adoption in the US. In the case of Custodia Bank, the Kansas branch of the Federal Reserve initially gave positive reviews, but subsequent reports from the DC branch presented a different view. The Feds cited concerns about capital requirements, risk management practices, and the management team’s banking experience.
Judge Rejects Motion to Dismiss Lawsuit
The Federal Reserve attempted to have Custodia Bank’s lawsuit dismissed, but Judge Scott Skavdahl of the U.S. District Court for the District of Wyoming refused to do so. He criticized the lengthy approval process and stated that it should have taken less time.
Hot Take: US Federal Reserve Faces Allegations of Anti-Crypto Actions
A crypto lawyer has accused the US Federal Reserve of participating in an anti-crypto effort known as Operation Chokepoint 2.0. This comes to light as Custodia Bank, a crypto custody firm, filed a lawsuit against the Federal Reserve after its application for a ‘master account’ was denied. The case highlights concerns about delays and uncertainty in the approval process, raising suspicions of coordinated efforts to hinder the crypto industry. The allegations and legal battle shed light on the challenges faced by crypto businesses in gaining recognition and support from traditional financial institutions.
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