Coinbase Exchange may have paved a favorable path for the cryptocurrency industry with its ongoing Operation Chokepoint 2.0 fight
Members of the crypto ecosystem have now spotlighted the firm’s role in this fight. This includes its recent legal actions against the FDIC, showing how the agency denied banking attempts to crypto firms.
Architects of Operation Chokepoint 2.0
DeFi_Dad on X highlighted that the Brian Armstrong-led firm “passed on the opportunity to enrich themselves via regulatory moats further, and instead launched a full-on assault on the bad faith actors in the government trying to squash the crypto industry.”
For this, he said he’s “forever grateful to Coinbase, saying he hopes “history rightfully lumps together.”
Operation Chokepoint 2.0 is considered a campaign launched by regulators in the United States to debank crypto firms.
It allegedly discourages traditional banks from providing their services to cryptocurrency companies. Like the name, it chokes off the ability of these firms to operate within the traditional financial system.
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The crypto community sees this as a strategy for US regulators to stifle growth in the digital asset ecosystem.
To the regulators concerned, the actions are necessary to ensure financial stability, prevent fraud, and combat money laundering.
The origin of Operation Chokepoint 2.0 started with the Department of Justice. Along with the FDIC and other agencies, they pressured banks to sever ties with businesses categorized as high-risk.
Industry leaders like Charles Hoskinson, John Deaton, and US representative French Hills have called for a probe into the claims.
Coinbase has invested resources and effort to get evidence that proves the FDIC spearheaded Operation Chokepoint 2.0.
Coinbase’s Role in Fighting Regulators
Last year, Coinbase obtained FDIC “pause letters” that truly revealed efforts to limit banking access for crypto firms in 2022 through FOIA requests.
However, the letters contained some highly redacted portions. According to Paul Grewal, the exchange’s CLO,
“The letters that show Operation Chokepoint 2.0 wasn’t just some crypto conspiracy theory. FDIC is still hiding behind way overbroad redactions. And they still haven’t produced more than a fraction of them.”
More recently, Coinbase secured the unredacted versions of these “pause letters” from the FDIC. The exchange scored this win following a court order that compelled the regulator to comply.
Upon clearing the redaction, Coinbase was able to prove that the FDIC oversaw a coordinated effort to stifle crypto firms.
As Paul Grewal noted, the targeted activities range from basic Bitcoin transactions to more complex offerings.
Will Donald Trump Probe the Chokepoint Complaints?
The broader crypto community is looking forward to the steps President-elect Donald Trump and his administration will take to curb these crackdowns.
Already, Trump has projected 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.
Considering his latest appointments, the probability that he would probe Operation Chokepoint 2.0 remains high.
One of his nominations is that of former SEC Commissioner and current CEO of Patomak Global Partners Paul Atkins to replace Gary Gensler as Chair. This move reflects his goal of ridding his administration of any anti-crypto policies.
