Recent regulatory actions taken by the US Federal Reserve against Customers Bank have reignited fears of Operation Chokepoint 2.0 within the crypto industry. The Fed’s move comes amidst allegations that the bank failed to adhere to key regulations such as the Bank Secrecy Act, Anti-Money Laundering laws, and OFAC regulations in its dealings with digital assets. As a result, Customers Bank has been mandated to strengthen its oversight, risk management, and compliance protocols within a span of 60 days.
One of the key criticisms leveled against Operation Chokepoint 2.0 is the centralization of decision-making in the hands of regulatory authorities. Gemini co-founder Tyler Winklevoss highlighted how the recent enforcement action requires Customers Bank to seek approval from the Fed before engaging in any new banking relationships with crypto companies. This centralized approach, according to Winklevoss, strips individual banks of their discretion and autonomy in deciding whether to provide banking services to crypto firms.
Winklevoss further expressed concerns about the potential escalation of regulatory measures if Vice President Kamala Harris wins the upcoming election and Senator Elizabeth Warren retains her position. He warned that the current enforcement actions are just the beginning and could pave the way for more severe restrictions on the crypto industry. Winklevoss painted a grim picture of the future under the Biden-Harris administration, suggesting that anti-crypto policies could inflict lasting damage on the industry if they persist for another four years.
The crypto community has been vocal in its opposition to Operation Chokepoint 2.0, viewing it as a targeted effort to stifle innovation and growth within the industry. While the Federal Reserve maintains its independence, the influence of the Biden administration over regulatory bodies like OFAC and the SEC cannot be discounted. As the industry braces for potential challenges ahead, the need for a more balanced and collaborative approach to regulation becomes increasingly apparent. Only time will tell how the crypto industry navigates the evolving regulatory landscape and the impact of Operation Chokepoint 2.0 on its future growth and stability.
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