In a recent post on X (Twitter), Sacks announced plans to investigate and reverse policies deemed detrimental to the cryptocurrency sector. This move aligns with Trump's commitment to ensuring fair banking practices for digital asset companies.
David Sacks addresses targeted suppression against banks.
Choke Point 2.0 refers to an alleged strategy by the U.S. government to limit cryptocurrency activity by leveraging banking regulations. This initiative came into focus in 2022 when the Federal Deposit Insurance Corporation (FDIC) was reportedly pressuring financial institutions to restrict services for cryptocurrency companies. Sacks stated this needs to be addressed.
"There are too many stories about people harmed by Choke Point 2.0. It needs to be examined," he said.
Coinbase recently substantiated these claims by releasing letters showing the FDIC had instructed banks to pause or cease banking activities related to cryptocurrency. Paul Grewal, Coinbase's legal director, described these findings as evidence that this is not just a conspiracy theory. He committed that Coinbase would continue to pursue transparency through legal measures.
"American businesses that comply with the law should be able to access banking services without government interference," Grewal emphasized.
Meanwhile, one of the most notable victims of these policies is Silvergate Bank, once a cornerstone of cryptocurrency banking. Chris Lane, former executive at Silvergate, described how the bank faced regulatory scrutiny despite its solvency. Lane accused regulators of abruptly withdrawing support, effectively dissolving the business his team had built over more than 13 years.
"When FTX collapsed, Silvergate survived 70% of deposits. A typical bank cannot survive 20%. FTX didn't kill us; our regulators did... Regulators came in the spring of 2023 and strictly limited the U.S. dollar deposits we could hold for customers' digital assets. Our entire business model disappeared," Lane said.
The bank's collapse, he claimed, was a direct result of targeted restrictions on the ability to serve cryptocurrency customers. In this context, David Sacks, Trump's head of cryptocurrency, called for a thorough investigation into Choke Point 2.0.
Experts involved in Trump's cryptocurrency-friendly vision.
With this commitment, Sacks joins others like Charles Hoskinson, the founder of Cardano, who calls for the cryptocurrency industry to unite against excessive regulatory encroachment. Hoskinson announced plans to collaborate with the incoming Trump administration to develop bipartisan policies balancing innovation with accountability.
Bitcoin investor Wayne Vaughn shares Hoskinson's perspective, criticizing the weaponization of the banking system.
"The U.S. government should not weaponize the banking system against political opponents and those deemed undesirable," Vaughn asserted.
Trump's approach of appointing cryptocurrency-supporting individuals to his administration aims to restructure the foundations of the current government, including figures like Brian Deese, the alleged architect of Choke Point 2.0.
By appointing cryptocurrency supporters to his transition team, the president-elect aims to foster a regulatory environment conducive to digital innovation.
Cryptocurrency analysts and other key figures view the 2024 election as a pivotal moment for the industry. As the cryptocurrency market awaits clarity, Trump's promises and Sacks' leadership could reshape the regulatory landscape in the U.S. regarding digital assets.
"The incoming administration has the opportunity to reverse many poor cryptocurrency policy decisions. Chief among them are politically motivated regulatory decisions like Choke Point 2.0," Grewal said.