Attorney John Deaton urges a federal probe into Operation ChokePoint 2.0, exposing FDIC’s actions to limit cryptocurrency services, including Bitcoin and Ethereum transactions. The crypto industry backs Deaton, citing stifled innovation and unfair treatment. Deaton emphasizes transparency and fair regulations for U.S. crypto growth.
Attorney John Deaton, an ardent XRP holders’ advocate and a lawyer who was in direct confrontation with the SEC, presented a petition seeking a federal investigation into Operation ChokePoint 2.0, which has been reported to target cryptocurrency activity throughout the United States.
John Deaton’s Fight Against Operation ChokePoint 2.0
He is willing to conduct the probe for free because, he claims, the people of America are entitled to more scrutiny and openness amid the rising intrusion of the government in the financial world.
A discovery order revealed a massive coordinated effort to restrict cryptocurrency-related services. Coinbase was able to successfully gain unredacted documents from the FDIC.
The exchange claims that between 2022 and 2023, the FDIC sent at least 25 letters to different banks, demanding that they either stop or scale back their services related to Bitcoin and Ethereum transactions, blockchain settlement networks, and tokenized deposit products.
According to an industry expert, Nic Carter, the measures have suppressed financial innovation, thus locking out the emergence of products like Bitcoin-reward debit cards and loans collateralized by Bitcoin.
He continued by saying that the actions by the FDIC were anti-consumer and anti-innovation as they halted the United States from gaining any ground in financial technology.
Deaton contributes his voice in the discussion by claiming that he is afraid that Operation ChokePoint 2.0 will be very destructive. He argues that this is not just a matter of cryptocurrency but an outright attack on the free market system in America. This kind of move creates a very bad precedent as it limits financial infrastructure for legitimate businesses.
Deaton further argued that unelected bureaucrats should not have the authority to determine who wins and who loses in the marketplace. He said such policies truly undermine America’s ability to remain a leading world power in innovation and economics.
Custodia Bank was among the worst-hit institutions. They could not access the infrastructures of banking. However, the Custodia case was only a part of the bigger issues related to businesses that were seeking innovation in the crypto space.
Calls for Accountability and Crypto-Friendly Regulations
As Deaton notes, the effects of Operation ChokePoint 2.0 go far beyond immediate impacts on companies and ripple into their ability to succeed and innovate overall within the industry. He described these actions as a direct assault on the foundational principles of free market capitalism and transparency.
The crypto industry has welcomed Deaton’s call for an investigation with open arms. In his appeals to Congress, Paul Grewal, the Chief Legal Officer of Coinbase, urged earnestly that hearings be held regarding the actions of the FDIC.
Nic Carter praised Coinbase’s choice to unveil the documents and advocated for prompt measures to tear down the systematic barriers that have been erected against the industry. The change in administration now to be manned by President-elect Donald Trump has also brought about a better regulatory environment.
There is also a new “Crypto Czar” David Sacks who promised to take on the ChokePoint agenda, as well as Rep. French Hill who endorses reforms on fair and balanced crypto regulations.
Many citizens have voiced optimism for future industry prospects, yet the sector still faces significant challenges. Federal Reserve Chair Jerome Powell has clearly stated that the Fed plans to make no investment in Bitcoin or similar initiatives.
In addition, critics claim one needs to attain regulatory clarity while making sure that fair treatment of digital assets is ensured before additional barriers inhibit innovation.
After all, Deaton himself recalled in a speech a call for accountability in investing which encouraged a balanced approach between innovation and investor protection.
As they await the response from the new administration, the efforts of Deaton shine bright light on what is urgently needed concerning Operation ChokePoint 2.0. This interested industry people that one who took significant steps toward a long-held aspiration: a steadfast movement toward a fair and transparent system that would promote growth and innovation in the realm of digital assets.
Based on the analysis of the FDIC documents and the response from the industry, it is clear that it is necessary to address these issues in a manner that the United States remains ahead of the rest of the world in the financial sphere.
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