Coinbase Exchange may have paved the way for the cryptocurrency industry with its fight against the ongoing Operation Chokepoint 2.0
Members of the crypto ecosystem have now highlighted the company’s role in this fight. This includes her recent legal actions against the FDIC, showing how the agency denied banking attempts to crypto companies.
Architects of Operation Chokepoint 2.0
DeFi_Dad on Xu pointed out that the Brian Armstrong-led company “passed on an opportunity to further enrich itself through the regulatory ditches and instead launched an all-out assault on bad-faith actors in government trying to trample the crypto industry.”
For that, he said he is “forever grateful to Coinbase,” saying he hopes “history will rightly come together.”
Operation Chokepoint 2.0 is considered a campaign launched by regulatory authorities in the United States to debank crypto companies.
It reportedly discourages traditional banks from providing their services to cryptocurrency companies. Like the name, it stifles the ability of these companies to operate within the traditional financial system.
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The crypto community sees this as a strategy by US regulators to stifle the growth of the digital asset ecosystem.
The relevant regulators need measures to ensure financial stability, prevent fraud and fight money laundering.
The origins of Operation Chokepoint 2.0 began with the Department of Justice. Together with the FDIC and other agencies, they pressured banks to cut ties with companies categorized as high risk.
Industry leaders such as Charles Hoskinson, John Deaton and the US representative for French Hills called for an investigation into the claims.
Coinbase invested resources and effort to obtain evidence proving that the FDIC spearheaded Operation Chokepoint 2.0.
Coinbase’s role in the fight against regulators
Last year, Coinbase received the FDIC’s “pause letters” that indeed revealed efforts to limit banking access for crypto companies in 2022 via FOIA requests.
However, the letters contained some heavily redacted parts. According to Paul Grewal, CLO of the exchange,
“Letters showing that Operation Chokepoint 2.0 was not just some crypto conspiracy theory. The FDIC is still hiding behind overly broad redactions. And they still haven’t produced more than a fraction.”
Coinbase recently secured unredacted versions of these “pause letters” from the FDIC. The exchange achieved this victory after a court order forced the regulator to comply.
After the redaction was removed, Coinbase was able to prove that the FDIC oversaw a coordinated effort to stifle crypto companies.
As noted by Paul Grewal, the targeted activities range from basic Bitcoin transactions to more complex offers.
Will Donald Trump Investigate Chokepoint Complaints?
The broader crypto community is looking forward to the steps President-elect Donald Trump and his administration will take to crack down on these actions.
Trump has already envisioned himself as a pro-crypto leader who will improve the digital asset ecosystem in the United States. Therefore, the expectations of American crypto investors are very high.
Given his recent appointments, the likelihood that he will investigate Operation Chokepoint 2.0 remains high.
One of his nominations is former SEC commissioner and current Patomak Global Partners CEO Paul Atkins to replace Gary Gensler as chairman. The move reflects his goal to rid his administration of any anti-crypto policies.
