Stuart Alderoty, General Counsel of Ripple, has criticized U.S. government regulators, accusing them of deliberately stifling the crypto industry through sophisticated blocking measures. According to Alderoty, this is part of a campaign called 'Operation Chokepoint 2.0,' aimed at restricting the access of crypto-related businesses to banking services.
On social media X, Alderoty shared his views on this campaign, comparing it to an initiative in 2012. At that time, agencies such as the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve (Fed), and the Office of the Comptroller of the Currency (OCC) were accused of pressuring banks to refuse services to industries deemed 'unfavored,' such as gun shops and payday loan providers. He noted that crypto is now becoming the new target of similar tactics and stated:
In 2012, regulatory agencies (FDIC, OCC, Fed) used banks as a tool to punish disfavored industries under the initial 'Operation Chokepoint' campaign. By 2021, crypto became the next target.
Ripple General Counsel Stuart Alderoty
The chain of events leading to 'Operation Chokepoint 2.0'
Alderoty highlighted a series of key events starting in 2021, when the Biden administration revoked the Fair Access to Banking Rule designed to ensure businesses had fair access to financial services. Then, in November 2021, the OCC mandated that banks needed prior approval before engaging in any crypto-related activities through Interpretative Letter 1179. Subsequently, the FDIC issued its own directive in April 2022. By January 2023, the Fed, FDIC, and OCC jointly warned about 'crypto-related risks' and provided additional recommendations in February.
Although these warnings assert that banks are not completely prohibited from serving crypto customers, Alderoty believes that behind that language is an implicit message discouraging it.
With experience as General Counsel at CIT Group and HSBC North America, Alderoty remarked:
These warnings always come with the familiar line: 'Banks are not prohibited from serving crypto customers.' But as a former banking advisor, I can decode this: 'Never think about that.'
He argues that this language use is an indirect tactic to make financial institutions hesitant to maintain relationships with crypto businesses. According to Alderoty, this is part of a broader campaign to isolate and undermine the industry under the guise of 'regulatory caution.'
Impact on the crypto industry
These moves have severely impacted the industry. According to Marc Andreessen, co-founder of Andreessen Horowitz, more than 30 technology and crypto founders have been denied access to banking services in the past four years, forcing many to leave the United States or pivot to other fields.
Tyler Winklevoss, co-founder of Gemini, also spoke out on platform X, calling this campaign:
'Operation Chokepoint 2.0 is a coordinated conspiracy by government officials to suppress political opponents by stripping them of access to banking services. This is a serious violation of federal law that needs to be prosecuted.'