Crypto News: What’s Operation Chokepoint And Why Did Donald Trump Shut It Down? | Bitcoinist.com

Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure ‘Operation Chokepoint’ is a term that became common under the regulatory regime during the Joe Biden administration. This operation marked part of the government’s initiatives to stifle the crypto industry back then, something which Trump has corrected since entering office

What Operation Chokepoint Was About

Details about Operation Chokepoint first came to light when Venture Capitalist Nic Carter revealed in 2023 that there was a new operation targeting the crypto space in the U.S. He noted that it was a well-coordinated effort to marginalize the industry and cut any ties it has to the banking system

Related Reading: Probability Of September Rate Cuts Rises Above 92%, Here’s What It Means For Bitcoin And CryptoAs part of Operation Chokepoint, regulators urged banks to stop providing services to crypto firms. Crypto founders like Tyler Winklevoss, Roman Storm, and Jesse Powell also confirmed that they and their firms were marginalized. Meanwhile, the world’s richest man, Elon Musk, revealed that 30 tech founders were secretly debanked

Crypto banks such as Silvergate, Signature, and Silicon Valley Bank were also victims of Operation Chokepoint because they refused to debank crypto firms. Nic Carter noted how anti-crypto Senator Elizabeth Warren encouraged a bank run against Silvergate after FTX collapsed

Carter further stated that Silvergate was solvent till the end and that directors chose to liquidate voluntarily, not because of the bank run but because of Operation Chokepoint. Bank regulators had informed the bank that they couldn’t serve crypto clients anymore, which impacted their business operations

The Venture Capitalist also noted that the voluntary wind-down was not evidence that crypto is risky to debanking, but rather a sign of how regulators stifled crypto banks. He added that these regulators can “capriciously” kill off the firms they regulate if they want. Meanwhile, it is worth noting that Operation Chokepoint even extended to someone like Donald Trump

The president mentioned in a CNBC interview that JPMorgan and Bank of America rejected his deposits. As such, this made Trump well aware of the plight of the crypto industry, which is why he promised to end it if he were elected

Donald Trump Fulfills His Promise

The U.S. president has fulfilled his promise to end Operation Chokepoint, signing an executive order that guarantees fair banking for all Americans. The order cited Operation Chokepoint as an example of how Bank regulators used supervisory scrutiny and other influence over regulated banks to encourage politicized or unlawful debanking activities

Related Reading: US SEC Becoming Pro-Crypto? The Quiet Stablecoin Amendment The Market Isn’t Talking AboutTo curb this, Federal banking regulators have been directed to remove the use of reputation risk or equivalent concepts that could result in politicized or unlawful banking from their guidance documents or other materials used for regulation. These regulators are to make this move within 180 days of the order. The Federal Reserve had already announced earlier that it had ended reputational risk oversight.

Overall crypto market cap at $3.91 trillion | Source: TOTAL on Tradingview.comFeatured image from iStock, chart from Tradingview.com Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.