- David Sacks vows to investigate Operation Choke Point 2.0, addressing allegations of regulatory harm to crypto firms.
- Coinbase disclosed 23 “pause letters” linked to FDIC, raising transparency concerns and prompting legal action.
- FSOC’s stablecoin concerns draw criticism for intensifying pressure on banks serving crypto issuers.
David Sacks, recently appointed as Donald Trump’s crypto czar, has acknowledged growing concerns surrounding Operation Choke Point 2.0. The operation, alleged to target the crypto industry by restricting its access to liquidity, has drawn attention from lawmakers, industry leaders, and the public. Sacks has pledged to investigate the matter, marking a key development in addressing these regulatory concerns.
Sacks Responds to Industry Complaints as Coinbase Exposes FDIC’s
In a public statement on the X platform, Sacks expressed concern over reports of harm caused by Operation Choke Point 2.0. He emphasized the need for scrutiny, responding to a post by Silvergate Bank CTO Chris Lane. Lane detailed how regulatory actions, not the collapse of FTX, led to Silvergate’s downfall. He explained that Silvergate survived a 70% deposit run after FTX’s collapse, a scenario most banks could not endure, but ultimately fell victim to regulatory pressure.
Adding to the controversy, Coinbase has disclosed 23 heavily redacted “pause letters” it received from the Federal Deposit Insurance Corporation (FDIC). These letters reportedly reveal actions tied to Operation Choke Point 2.0. Coinbase has filed a legal motion seeking unredacted versions of these documents to uncover further details.
During a House Financial Services Committee hearing, Rep. French Hill supported calls to investigate the operation, asserting that the next Congress has the authority to intervene. Hill underscored the urgency of examining these practices to address concerns within the industry.
FSOC Extends Concerns Over Stablecoins
While criticism of regulators grows, the Financial Stability Oversight Council (FSOC) has maintained its focus on the perceived risks posed by the crypto industry. The FSOC has specifically targeted stablecoins, citing potential threats to financial stability. Custodia Bank CEO Caitlin Long countered these claims, arguing that anti-crypto policies have forced banks to sever ties with crypto issuers.
