Operation Chokepoint 2.0: US Banking Regulators Reportedly Trying to Drive Crypto Business Out of the Financial System

According to a recent white paper released by four members of Cooper&Kirk Law Firm, US banking regulators are reportedly attempting to “drive crypto business out of the financial system.”. This paper, entitled “Operation Chokepoint 2.0”, points out that U.S. banking regulators are ostensibly waging a “secret financial war” against the encryption industry. After laying the foundation for labeling legitimate companies as “reputational risk,” federal banking regulators, with the help of state officials, “have shifted to the task of clearing accounts from every bank they supervise.”.

Law Firm Paper: US banking regulators are waging a “secret financial war” against the encryption industry

Outline

I. Introduction to Operation Chokepoint 2.0
– Background of the white paper released by Cooper&Kirk Law Firm
– Importance of the issue of secret financial war against the encryption industry
II. US Banking Regulators and Reputational Risk
– Definition of reputational risk
– How legitimate companies are being labeled as such
– The impact of labeling on crypto business
III. Task of Clearing Accounts
– How federal banking regulators and state officials are working to clear accounts from every bank they supervise
– The impact of clearing accounts on crypto businesses
IV. The Alleged War Against the Encryption Industry
– The reasons behind the alleged war against the encryption industry
– Impact of the war on the banking system
– Implications for the future of crypto businesses
V. Conclusion
– Need for transparency and accountability from the US banking regulators
– Call to action to protect crypto businesses against unfounded regulation

Article

In a recently released white paper by four members of Cooper&Kirk Law Firm, it has been disclosed that US banking regulators are reportedly working to drive crypto business out of the financial system. The paper, entitled “Operation Chokepoint 2.0”, highlights the secret financial war being waged by U.S. banking regulators against the encryption industry.
This war has been laid out in detail in the white paper where it has been explained that federal banking regulators are labeling legitimate companies as “reputational risk”. The repercussion of these labels has been the clearing of accounts from every bank they supervise with the support of state officials. This has directly impacted crypto businesses as they are being categorised under this label, resulting in the closure of their business accounts and ultimately, their business.
What is the impact of this on crypto businesses? The effect has been devastating, as it has left many with no other choice but to shut down their operations. This has led to the erosion of confidence in the banking system as a whole, especially as banks are seen as untrustworthy intermediaries. Furthermore, studies have shown that banks gain a lot from these intermediaries, particularly in collecting fees, yet they are very hesitant to engage with the encryption industry due to this reputational risk.
So why is there such a concerted effort by US banking regulators to drive the encryption industry out of the financial system? The reason behind this is a concern about the potential for illicit activities such as money laundering and terrorist financing, which are often associated with the encryption industry. However, labeling crypto businesses as reputational risks is a blanket approach, which does not take into account that not all crypto businesses are involved in illegal activities.
There are several implications of this situation for the future of crypto businesses. Firstly, it may lead to more stringent and unfair regulation, handcuffing these businesses and crippling their growth, ultimately leading to erosion in the innovation of the crypto industry. This would limit the benefit that innovation could bring to the financial system, whilst also removing the current ability for individuals to get direct access to financial services.
In conclusion, there is a need for transparency and accountability from the US banking regulators towards crypto businesses. They should be given an opportunity to participate in conversations about the mitigation of potential illicit activities, while not being disproportionately targeted. With better communication, there could be a more beneficial relationship between banking regulators and the crypto industry.

FAQs

1. What is Operation Chokepoint?
– Operation Chokepoint is the name used for a coordinated effort by the US Department of Justice, Federal Deposit Insurance Corporation, and other government agencies to actively identify, monitor, and investigate banks and payment processors that may be enabling fraudulent or illegal activities.
2. How is the war against the encryption industry perceived by the crypto community?
– The war against the encryption industry is indirectly perceived by the crypto community as a threat towards the growth and innovation of the industry, where most companies are legitimate and not involved in illegal activities.
3. What can the crypto community do to fight against the reputational risk labeling of their businesses by US banking regulators?
– Calls for transparency and accountability, as well as participating in conversations, can help reduce the impact of the labeling of reputational risks on crypto businesses. Additionally, they can work towards protecting themselves with sound financial management principles that align with legal, financial and ethical standards.