Gushiken Yona
SEC Commissioner Hester Peirce is pushing for a major shift in cryptocurrency regulation, urging an end to what she calls “Operation Chokepoint 2.0.” Speaking on Fox Business, Peirce outlined a plan to provide clarity for the crypto industry and foster innovation, a move that could reshape the digital asset landscape in the United States.
Peirce Blasts Chokepoint 2.0, Lays Out Three-Step Crypto Plan
Peirce criticized government efforts to limit the crypto industry’s access to banking services, particularly custody. “Stop the chokepoint aspect of government regulation,” she told Fox Business host Liz Claman.
She argued that clear access to such services is crucial for the industry’s growth. The term “Operation Chokepoint 2.0” refers to what many in the crypto industry perceive as a coordinated effort by U.S. regulators to discourage banks from providing services to cryptocurrency companies.
This alleged effort mirrors “Operation Chokepoint,” a controversial Department of Justice initiative under the Obama administration that aimed to curb fraud by targeting payment processors and banks dealing with certain “high-risk” businesses. Critics of both initiatives argue they unfairly targeted legitimate businesses and limited their access to essential financial services.
Peirce proposed a three-pronged approach for cryptocurrency regulation in the U.S.:
- End the Chokepoint: Allow crypto businesses to work with regulated financial institutions for secure storage and transfer of digital assets.
- Clarify SEC Jurisdiction: Define clear guidelines on which crypto activities fall under securities regulations, giving the industry much-needed certainty.
- Collaborate with Industry: Engage in an open, transparent process with stakeholders to determine how existing regulations apply to digital assets and where adjustments are needed.
Operation Chokepoint 2.0: Crypto Industry Feels the Squeeze
The impact of Operation Chokepoint 2.0 has been felt acutely within the crypto industry. Gabor Gurbacs, founder of PointsVille and strategy advisor at Tether, described the devastating effects: “Many entrepreneurs were debanked in operation chokepoint 2.0. without warning, explanation or ability to appeal. Excommunicado.”
He alleged strong-arm tactics by government agencies, stating, “Government mafiosi from the Treasury and OCC called and threatened banks to debank specific people and companies.” Caitlin Long, founder of Custodia Bank, echoed these concerns, asserting that such actions are not uncommon. “Bank regulators do this kind of stuff that’s not legal all the time, and they hide behind confidential supervisory information,” she said.
"Bank regulators do this kind of stuff that's not legal all the time, and they hide behind confidential supervisory information."@CaitlinLong_ on Operation Chokepoint 2.0. pic.twitter.com/FQ8QxvucXX
— TFTC (@TFTC21) November 27, 2024
Crypto Community Divided: Skepticism and Cautious Optimism
Reactions within the crypto community varied. Data analyst Dakota Sidwell expressed doubt, tweeting, “Hester will do nothing to assist the broader public.” However, David Barrera, co-founder and CEO of Enumma, offered a more nuanced take.
While acknowledging Peirce’s intentions, he cautioned, “Something tells me she won’t be generous to crypto in trying to set the perimeter outside of which the SEC doesn’t have jurisdiction.” Barrera believes Peirce may still favor classifying many tokens as securities, posing challenges for initial coin offerings (ICOs) seeking to avoid SEC oversight.
Will the SEC Embrace Change?
The debate over how to regulate cryptocurrencies in the U.S. continues. Many believe a clear framework is essential for the sector’s legitimacy and growth.
Gemini co-founder Tyler Winklevoss, in a stark warning, stated, “As long as these political hits on industries are allowed, America’s economy will continue to be crippled. It’s called Operation Choke Point 2.0 for a reason — there was a 1.0 during the Obama Administration. Let’s make sure there can never be a 3.0.”
Peirce’s call for collaboration could mark a turning point. However, the SEC’s willingness to embrace these reforms remains uncertain.
Read More
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- Trump Nominates David Sacks as White House Crypto and AI Czar
Yona has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is an official media and publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
