The US Government Wants to Cut Crypto’s Access to Banks: Nic Carter
Important takeaways
- Bitcoin lawyer Nic Carter believes the US government is trying to cut crypto off from the banking sector.
- Carter claimed that the Biden administration was reviving the Obama-era Operation Choke Point.
- Carter pointed to 14 different events in the past 10 weeks that suggested a coordinated strategy to strip the crypto industry of its exit ramps in the United States.
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Crypto companies may soon be deprived of banking services in the US, just like online poker was during the Obama era, says Nic Carter.
Operation Choke Point 2.0
Castle Islands general partner Nic Carter believes the crypto industry is under attack by the US government.
In a Substack post published yesterday, Carter claimed that the Biden administration is currently “using the banking sector to orchestrate a sophisticated, widespread attack against the crypto industry” by discouraging banks from doing business with crypto companies.
According to Carter, the government’s approach replicates a strategy used by the Obama administration, called Operation Choke Point, which tried to marginalize specific industries by limiting their access to banking services. Industries affected included the online poker industry, firearms manufacturers, adult entertainers, lotteries and money transfer networks.
As for the crypto space, Carter listed 14 instances in the past 10 weeks where crypto-friendly banks had faced government pressure — or otherwise chosen to stop offering services to crypto companies. He claimed that influential members of Congress, the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Department of Justice were involved in what he called Operation Choke Point 2.0.
Notable among these events were statements by the Fed, FDIC, OCC and the National Economic Council strongly discouraging banks from holding crypto or dealing with crypto clients on a “safety and soundness basis”. The Fed’s rejection of Custodia’s application to join the Federal Reserve, the DOJ investigation into Silvergate, and Signature and Metropolitan Commercial Bank’s decision to reduce (or completely shut down) their crypto services were also mentioned.
“Time and time again using the phrase ‘safety and soundness’ [the government has] made it clear that for a bank to touch public blockchains in any way is considered unacceptably risky,” Carter said, adding that while banks are not explicitly prohibited from serving crypto customers, “the writing is on the wall.”
Carter’s words were echoed by Blockchain Association attorney Jake Chervinsky, who tired on Twitter that federal agencies had “weapons[d] control of the banking system to impose discrimination against crypto companies.”
Disclaimer: At the time of writing, the author of this piece owned BTC, ETH and several other crypto assets.
