David Sacks, the White House’s Crypto and AI Czar, is stepping into the storm surrounding Operation Choke Point 2.0, a program that crypto insiders say has sabotaged businesses, wiped out innovation, and gutted the industry’s financial lifelines.

In a public statement, David hinted at immediate scrutiny, saying, “There are too many stories of people being hurt by Operation Choke Point 2.0. It needs to be looked at.”

His statement came after Chris Lane, former CTO of Silvergate Bank, publicly detailed how regulatory moves destroyed the bank, a once-vital player in the crypto economy.

“FTX didn’t kill us. Regulators did,” he wrote, explaining how the bank was driven out of business despite surviving a 70% deposit run after the FTX collapse. Silvergate had been instrumental in creating the Silvergate Exchange Network (SEN), a crucial infrastructure for crypto transactions.

But according to Chris, U.S. regulators pulled the rug from under them in early 2023, severely limiting the dollar deposits Silvergate could accept from crypto clients. The bank had no choice but to shut down and liquidate.

This sudden pivot from regulators, described by Chris as a “bait and switch,” has become a rallying cry for those who see Operation Choke Point 2.0 as a deliberate move to suffocate the crypto industry.

Crypto executives speak out

Charles Hoskinson, co-founder of Cardano and Ethereum, called Operation Choke Point 2.0 a “coordinated global campaign against crypto.” He took to X (formerly Twitter) to decry the program’s fallout, saying it has crushed businesses, stifled economies, and slowed innovation worldwide.

“This isn’t just an American problem,” he wrote. “So many people put their heads in the sand, saying it’s not as bad as the industry makes it out to be. It’s worse. Global. So many businesses were harassed, fined, audited, and de-platformed.”

Charles warned that the damage from this crackdown could take years to undo. He urged the crypto community to act quickly to push for legislation, saying, “We have a small window of time to get a law passed.”

Gabriel Abed, chairman of Binance and a prominent figure in global crypto circles, revealed how he was personally targeted. First Citizens Caribbean Bank shut down his accounts, which he had held for over a decade, because of a bitcoin-related deposit.

The bank’s CEO admitted the closure was to protect its relationships with U.S. correspondent banks, which had labeled crypto businesses as “high-risk.”

Biden administration accused of reviving Choke Point

Crypto leaders are pointing fingers at the Biden administration, accusing it of resurrecting Operation Choke Point. The original program, launched in 2013 under the Obama administration, pressured banks to sever ties with industries deemed “high-risk,” such as payday lenders and firearms dealers.

Crypto execs believe that legitimate businesses were being unfairly targeted. While the program officially ended in 2017, crypto insiders claim its successor began in 2021, this time with blockchain companies in its sights.

Coinbase CEO Brian Armstrong has been one of the most vocal. He accused Senator Elizabeth Warren and SEC Chair Gary Gensler of orchestrating the crackdown. “This was one of the most unethical and un-American things that happened in the Biden administration,” Brian said.

He revealed that Coinbase has filed Freedom of Information Act (FOIA) requests to uncover the extent of government involvement.

Tyler Winklevoss, co-founder of Gemini, also weighed in, saying he was “debanked because I’m in crypto.” Tyler confirmed that over 30 tech founders were similarly targeted, many from firms backed by Andreessen Horowitz.

“This is about control, not compliance,” said Marc Andreessen, a venture capitalist and another debanked tech founder. He argued that this operation goes beyond crypto, framing it as an attack on individual freedom.

The stakes are high for the Democrats, who Brian said the crackdown was “a major factor in them losing the election,” calling Warren “a liability” for the party.

A financial crisis for the crypto industry

Andrew Torba, founder of Gab, described how Operation Choke Point 2.0 has effectively choked businesses to death. “Without a bank account, you can’t store cash, run payroll, or pay bills,” he said.

His accounts were repeatedly shut down by banks, credit unions, and even Christian financial institutions. “The reason was always the same: ‘Our terms say we can do this anytime, for any reason, or no reason at all.’”

Banks have admitted off the record that they are being pressured by the government, with threats of audits and regulatory scrutiny looming over their heads.

Caitlin Long, CEO of Custodia Bank, has also found herself in the crosshairs. Her bank has been debanked multiple times, prompting her to sue the Federal Reserve.

Her lawsuit, which will see oral arguments just a day after Inauguration Day, has been described as one of the most “significant” legal challenges against government overreach in the banking sector.

The fallout from Operation Choke Point 2.0 is a reminder of how quickly an entire industry can be brought to its knees when financial access is weaponized. Whether Sacks can bring clarity — or justice — remains to be seen.

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