Ripple's Chief Legal Officer Reveals US Regulators' Secret War on Crypto
Date: 2024-12-02 Author: Oliver Abernathy Categories: BUSINESS
Ripple's chief legal officer Stuart Alderothy has claimed that US regulators are deliberately trying to undermine the crypto sector. He believes that the crypto industry has seen tightening regulations in recent years as part of what he calls "Operation Choke 2.0," a coordinated campaign to restrict crypto companies' access to banking services.
Alderothy, speaking on X on Saturday, recalled the first "Operation Choke" launched in 2012. Back then, the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve, and the Office of the Comptroller of the Currency (OCC) allegedly pressured banks to stop servicing certain industries, including gun shops and microfinance institutions. Now, according to Alderoti, cryptocurrency has become the latest target of such measures.
“In 2012, regulators (FDIC, OCC, Fed) used banks as a tool against undesirable industries like gun shops and microfinance institutions. Fast forward to 2021, and crypto is now in the crosshairs,” he noted.
Ripple’s chief legal officer listed key events, starting with the repeal of the Fair Access to Banking rule in January 2021, which was supposed to ensure equal access to banking services. Later, in November of that year, the OCC issued Interpretive Letter 1179, requiring pre-approval from banks before engaging in cryptocurrency activities. In April 2022, the FDIC followed suit, and in early 2023, the Fed, FDIC, and OCC issued warnings about the risks of cryptocurrency. While banks have not officially banned crypto companies from servicing them, Alderoti saw hidden threats in these actions.
“As a former general counsel of a bank, I can decipher these statements: ‘Don’t even think about trying,’” he said, adding that such language serves as a covert tool to dissuade banks from working with crypto companies.
He accused regulators of waging a campaign to isolate the crypto sector under the guise of warning about risks.
These measures have already affected many entrepreneurs. According to Marc Andreessen, co-founder of Andreessen Horowitz, more than 30 tech and crypto entrepreneurs have lost access to banking services in the past four years, forcing some of them to leave the country or change their industries. Gemini co-founder Tyler Winklevoss also claimed Saturday that "Operation Choke 2.0" is a coordinated plot by government officials to target political opponents by freezing their bank accounts, which he believes is a federal crime.
