Gemini co-founder Tyler Winklevoss has raised concerns over Operation Chokepoint 2.0 following the US Federal Reserve’s recent regulatory action against Customers Bank. The Fed’s move came as a result of alleged violations of the Bank Secrecy Act, Anti-Money Laundering laws, and Office of Foreign Assets Control (OFAC) regulations related to digital assets. Customers Bank has been given 60 days to enhance its oversight, risk management, and compliance measures, including board oversight, BSA/AML compliance, and OFAC adherence.
Crypto stakeholders have criticized Operation Chokepoint 2.0 as a policy intended to undermine the industry under President Biden’s administration. Winklevoss pointed out that while the Federal Reserve is independent, the Biden administration has significant influence over OFAC and the SEC. He argued that the Fed’s enforcement action highlights the centralization of decision-making, specifically requiring 30 days’ notice before establishing new banking relationships with crypto companies.
Centralized Control Concerns
Winklevoss expressed concerns about the centralized decision-making process that now places the Federal Reserve as a gatekeeper for crypto companies seeking bank accounts. He emphasized the need for principles-based regulation that allows individual banks to determine whether to provide banking services to a company. According to Winklevoss, the current regulatory measures could escalate if Vice President Kamala Harris wins the upcoming election and Elizabeth Warren remains in the Senate, potentially leading to more restrictive policies towards the industry.
The Gemini co-founder cautioned that the current regulatory actions are just the beginning and that harsher measures could be introduced if the Biden-Harris administration continues its anti-crypto stance for another four years. He characterized the Fed’s recent enforcement action as a mild gesture, suggesting that more stringent policies could be implemented if political changes occur. Winklevoss emphasized that the industry could face significant damage if the administration’s anti-crypto policies persist.
Tyler Winklevoss’ warnings about Operation Chokepoint 2.0 and the potential repercussions of the Biden-Harris administration’s regulatory actions highlight the ongoing challenges faced by the crypto industry. The need for a fair and transparent regulatory framework that encourages innovation and growth while safeguarding against financial crimes remains a critical issue for stakeholders in the crypto space.
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