A recent report from the Federal Deposit Insurance Corporation (FDIC) has raised eyebrows. It details internal communications about banking activities related to cryptocurrency.
John E. Deaton, a well-known advocate for crypto, is calling for Congress to investigate. He believes there's a coordinated effort by regulators to undermine the digital asset sector. He refers to this as "Operation ChokePoint 2.0."
The documents came to light after a court order was issued to Coinbase, a publicly traded crypto exchange, back in November. They reveal that the FDIC directed banks to pause crypto-related services while they reviewed their policies.
Critics, including Deaton, argue that these directives show a systematic attempt to limit access to essential financial services. This could stifle legitimate businesses in the rapidly growing crypto sector.
Deaton tweeted, “What we’ve learned thus far suggests coordinated, multi-agency action driven by political agendas rather than sound policy or law.”
He emphasizes that this issue goes beyond just cryptocurrency. It touches on the integrity of institutions and the unchecked power of unelected officials.
Deaton previously ran for Senate against Elizabeth Warren, a vocal critic of crypto. Despite his loss, he continues to advocate for the industry and is determined to lead an investigation into what he sees as regulatory overreach.
He warns that actions like those outlined in the FDIC report could set a dangerous precedent. They might allow agencies to stifle innovation and enforce laws selectively, all without proper oversight.
This controversy echoes past disputes involving Custodia Bank, which sued the Federal Reserve after being denied a master account. Deaton calls Custodia’s case pivotal, highlighting the growing influence of regulatory bodies over private enterprises.
The FDIC defends its practices, citing the need to assess risks associated with volatile markets. However, Deaton argues that emerging evidence suggests some regulatory actions may be politically motivated rather than based on sound policy.