Tyler Winklevoss warned that the Federal Reserve’s enforcement actions against the cryptocurrency industry could mark the beginning of a new round of crackdowns, which he called “Operation Choke Point 2.0.” He also suggested that the cryptocurrency industry could face even tougher regulatory challenges if Kamala Harris wins the November election.
Previously, Winklevoss also slammed Harris for not attending an August 8 roundtable discussion with cryptocurrency leaders.
This article will further explore Winklevoss’s views, analyze the potential impact of the Fed’s actions on the cryptocurrency industry, and discuss the possible long-term consequences of this regulatory approach to the financial ecosystem.
Fed's enforcement action against Customers Bank stirs controversy
The Federal Reserve released a 13-page enforcement document on Friday requiring Customer Bank to submit written notice to the Federal Reserve 30 days in advance before establishing a new banking relationship with a crypto company.
Gemini exchange co-founder Tyler Winklevoss has criticized the Federal Reserve’s enforcement action at Customers Bank amid heightened regulation of the cryptocurrency industry.
Winklevoss expressed his opinion on social media X, believing that the Fed's action was another suppression of the cryptocurrency industry. He pointed out: "Today, the Federal Reserve confirmed that 'Operation Choke Point 2.0' is still in full swing and provided valuable insights into how it works. At the same time, it also confirmed that Harris' position on cryptocurrency 'reset' is a scam."
As one of the few banks in the United States that supports cryptocurrency business, Winklevoss is worried that the Fed's enforcement action will lead to a bottleneck in the development of the industry. He emphasized that the Fed's requirement actually makes it a "direct gatekeeper for cryptocurrency companies' ability to obtain new bank accounts."
Winklevoss further pointed out that this regulatory approach is not in line with the spirit of principle-based regulation. He believes that banks should have the autonomy to decide who to serve. He advocates that the decision-making power of bank services should be dispersed throughout the banking industry, rather than concentrated in the hands of the Federal Reserve.
He added: “Now that the decision has been centralized in the hands of the Fed, it will be at the Fed’s discretion, and the bottleneck has been created.”
Winklevoss questions Fed's enforcement basis
In its enforcement action, the Federal Reserve cited Customers Bank for significant deficiencies in risk management and compliance with anti-money laundering regulations. However, Tyler Winklevoss questioned this, arguing that the allegations of these alleged deficiencies were vague and lacked a clear nature of the allegations.
Winklevoss believes that the Fed's allegations are not supported by facts or evidence. He pointed out: "The Fed has not provided any substantive findings to support its claims, but instead asks the public to simply trust their judgment. This approach is too hasty and lacks transparency."
He further pointed out that there are deep motives behind the Fed's actions. He believes that the Fed's real purpose is not just regulatory compliance, but trying to control banks' service decisions for specific companies and industries by establishing public cases, which is actually an illegal interference in the autonomy of the banking industry.
Winklevoss went on to emphasize that if Kamala Harris wins the November election, the Fed could become more aggressive in its actions, further restricting the cryptocurrency industry. His warning reveals deep concerns about the current political and regulatory environment, as well as concerns about the future of the cryptocurrency industry.
Conclusion:
Winklevoss's criticism of the Fed highlights the tense relationship between the cryptocurrency industry and regulators. This dispute is not only a challenge to the transparency and rationality of regulation, but also a fight for industry autonomy. It reminds us that while pursuing financial security and stability, we should also leave room for innovation to achieve harmonious progress between regulation and industry development.
As the industry develops and regulatory policies mature, we expect the cryptocurrency market to continue to promote financial innovation while ensuring compliance. Winklevoss's concerns and criticisms can be seen as a catalyst for the industry to move forward, prompting regulators, industry participants and the public to think together about how to find a balance between ensuring security and promoting innovation.
