Operation Choke Point 2.0 is ‘not dead yet’

CEO of Custodia Bank Caitlin Long stated that the infamous Operation Choke Point 2.0 is very much still alive, contrary to what Vice President J.D Vance said in his speech about the crypto industry.

In a recent interview, Caitlin Long criticized J.D Vance’s speech back on May 28 when he declared that “Operation Choke Point 2.0” is dead. The CEO of crypto-friendly Custodia Bank disagreed with his statement, stating that it was an exaggeration.

According to Long, the statement is inaccurate due to the fact that despite major advancements made in the U.S. crypto industry under Trump, a lot of federal debanking tools from the Biden Administration are still in place today.

“It’s not dead yet unfortunately because the tools that were used to target our industry are still in place,” said Long in an interview clip at Arch Public.

Operation Chokepoint 2.0 is a term widely used by traders and crypto industry figureheads to refer to how financial regulators during the Biden presidential term, conspired to discourage banks from doing business with crypto firms. Ultimately, cutting off banks from the crypto industry.

At the time, federal agencies like the SEC, the Fed, FDIC, and OCC issued statements that highlighted the risks that banks face if they deal in cryptocurrency. The SEC in particular, was accused of going after crypto firms like Binance, Coinbase and Ripple with lengthy lawsuits with muddled rules that blurred the lines between crypto and securities.

Caitlin Long believed that most of these debanking tools are still in place within the current federal system. Most recently, the Federal Reserve pulled back its guidance warning banks about crypto risks. The OCC also did the same by issuing a statement that would allow banks to buy and sell crypto assets on behalf of customers.

However, some non-public “de-banking tools” like informal supervision, exam pressure, and pause letters from the FDIC that stifle banks serving crypto are still in place.

Until these elements have been officially reversed or fully dismantled, Caitlin Long insists the operation continues. Not only that, Long claimed that some of the people responsible for Operation Chokepoint 2.0 are “still in place at the federal banking industries as well.”

Earlier in April, pro-crypto Senator Cynthia Lummis criticized the Fed after they removed the restrictive guidance on banks holding crypto assets. She claimed that it was all “lip service” due to the Fed still blocking crypto-friendly banks from receiving master accounts.

Back in 2022, Caitlin Long and Custodia Bank sued the Fed alleging that it purposely prolonged its application for a master account for 19 months without any answer.