Donald Trump pledged to end the alleged Operation Choke Point 2.0 if re-elected. Central to this effort is David Sacks, one of the primary appointees serving as “crypto czar” in Trump’s pro-crypto push.
In a recent post on X (Twitter), Sacks vowed to investigate and reverse policies seen as undermining the cryptocurrency sector. This move aligns with Trump’s commitment to ensuring fair banking practices for digital asset companies.
David Sacks to Tackle Targeted Suppression against Banks
Operation Choke Point 2.0 refers to an alleged US government strategy to curtail cryptocurrency activity by leveraging banking regulations. The initiative came into focus in 2022 when the Federal Deposit Insurance Corporation (FDIC) reportedly pressured financial institutions to limit services to crypto firms. Sacks says this needs to be addressed.
“There are too many stories of people being hurt by Operation Choke Point 2.0. It needs to be looked at,” he said.
Coinbase recently substantiated these claims by releasing letters showing that the FDIC instructed banks to pause or cease crypto-related banking activities. Paul Grewal, Coinbase’s Chief Legal Officer, described the findings as evidence that this was not just a conspiracy theory. He committed that Coinbase would continue pursuing transparency through legal means.
“Law-abiding American businesses should be able to access banking services without government interference,” Grewal emphasized.
Meanwhile, one of the most high-profile casualties of these policies was Silvergate Bank, once a cornerstone of crypto banking. Chris Lane, a former executive at Silvergate, described how the bank faced regulatory scrutiny despite its solvency. Lane accused regulators of abruptly withdrawing support, effectively dismantling the business his team had built over 13 years.
“When FTX went down, Silvergate survived a 70% run on deposits. A typical bank cannot survive 20%. FTX didn’t kill us, our regulators did…Regulators came in sometime in Spring 2023 and severely limited the amount of US dollar deposits we could hold for digital asset clients There went our entire business model,” Lane stated.
The bank’s demise, he claimed, was a direct result of targeted restrictions on its ability to serve cryptocurrency clients. Against this backdrop, David Sacks, Trump’s crypto Czar, has called for a thorough investigation into Operation Choke Point 2.0.
Experts Join Trump’s Crypto-Friendly Vision
With this commitment, Sacks joins others like Charles Hoskinson, founder of Cardano, who urges the crypto industry to unite against regulatory overreach. Hoskinson announced plans to collaborate with the incoming Trump administration to construct bipartisan policies that balance innovation with accountability.
Bitcoin investor Wayne Vaughn shares Hoskinson’s sentiment, criticizing the weaponization of the banking system.
“The US government shouldn’t weaponize the banking system against its political opponents and people that are deemed otherwise undesirable,” Vaughn asserted.
Trump’s approach to appointing pro-crypto individuals for his incumbent administration aims to deconstruct the current administration’s establishments, which include figures like Brian Deese, the alleged architect of Operation Choke Point 2.0.
By appointing pro-crypto advocates to his transition team, the president-elect aims to foster a regulatory environment conducive to digital innovation.
Crypto analysts and other key figures view the 2024 election as a pivotal moment for the industry. As crypto markets await clarity, Trump’s promises and Sacks’ leadership could reshape the regulatory market in the US for digital assets.
“The incoming administration has the opportunity to reverse so many poor crypto policy decisions. Chief among them is politically motivated regulatory decisions like Operation Choke Point 2.0,” Grewal said.
