Counters the 2.0 point choke
December 7, 2024
Donald Trump has vowed to end what he claims is Operation Choke Point 2.0 if he is reelected. At the heart of that effort is David Sachs, a key appointee who serves as the “crypto czar” in Trump’s pro-crypto push.
In a recent post on Twitter, Sachs pledged to investigate and reverse policies seen as undermining the cryptocurrency sector. The move is in line with Trump’s commitment to ensuring fair banking practices for digital asset companies.
David Sachs Takes on Targeted Crackdown on Banks
Operation Choke Point 2.0 refers to an alleged U.S. government strategy to curb cryptocurrency activity by exploiting banking regulations. The initiative came to prominence in 2022 when the Federal Deposit Insurance Corporation (FDIC) reportedly pressured financial institutions to limit services to crypto companies. Sachs says this needs to be addressed.
“There are a lot of stories of people being affected by Operation Choke Point 2.0,” he said. “That needs to be looked into.”
Coinbase recently confirmed these claims by releasing letters showing that the FDIC had directed banks to halt or terminate crypto-related banking activities. Paul Grewal, Coinbase’s chief legal officer, described the findings as evidence that this was not just a conspiracy theory. He pledged that Coinbase would continue to pursue transparency through legal means.
“Law-abiding American businesses should be able to access banking services without government interference,” Grewal said.
At the same time, one of the most prominent victims of these policies was Silvergate Bank, once a cornerstone of digital banking. Chris Lane, a former Silvergate executive, described how the bank faced regulatory scrutiny despite its solvency. Lane accused regulators of abruptly withdrawing support, effectively dismantling the business his team had built over 13 years.
“When FTX collapsed, Silvergate survived a 70% withdrawal of deposits. A normal bank can’t survive 20%. FTX didn’t kill us, regulators killed us… Regulators came in sometime in the spring of 2023 and severely reduced the amount of USD deposits we could hold for digital asset clients. That’s where our entire business model went,” Lin said.
He claimed that the bank’s collapse was a direct result of targeted restrictions on its ability to serve crypto clients. In this context, David Sachs, Trump’s crypto czar, called for a full investigation into Operation Chuck Point 2.0.
Bitcoin investor Wayne Vaughn shares Hoskinson’s sentiment, criticizing the weaponization of the banking system.
“The U.S. government should not weaponize the banking system against its political opponents and people it deems undesirable,” Vaughn said.
Trump’s approach of appointing pro-crypto individuals to his current administration is aimed at dismantling the current administration’s institutions, which include figures like Brian Deese, the alleged architect of Operation Chuck Point 2.0.
By appointing cryptocurrency advocates to his transition team, the president-elect aims to foster a regulatory environment conducive to digital innovation.
Cryptocurrency analysts and other key figures see the 2024 election as a pivotal moment for the industry. While crypto markets await clarity, Trump’s promises and Sachs’ leadership could reshape the U.S. regulatory market for digital assets.
“The next administration has the opportunity to reverse many of the poor policy decisions on cryptocurrencies,” Grewal said. “Among the most significant are politically motivated regulatory decisions like Operation Chuck Point 2.0.”
