According to a recent white paper published by four members of the law firm Cooper&Kirk, PLLC, U.S. banking regulators are trying to “drive the crypto business out of the financial system.” The paper, titled “Operation Choke Point 2.0,” claims that after laying the groundwork by labeling legitimate businesses as “disreputable,” federal banking regulators, with the help of state authorities, have “turned to purging accounts from each supervised bank.
Constitutional issues raised by Operation Choke Point 2.0: corporate deprivation of due process and key structural constitutional protections
Five days ago, Bitcoin.com News published an article examining recent discussions in the crypto community regarding Operation Chokepoint and why crypto advocates believe the U.S. government aims to eliminate access to cryptocurrencies. On Monday, Washington, D.C. law firm Cooper &Kirk published awhite paperon the subject, noting that U.S. banking regulators are ostensibly waging a “secret financial war” against the crypto industry.
The paper’s authors, David Thompson, John Ohlendorf, Harold Reeves, and Joseph Masterman, begin with a description of “Operation Chokepoint 1.0 ” and delves into “Operation Chokepoint 2.0. The first iteration of Operation Suspicion began by labeling legitimate, law-abiding cryptographic entities as “reputational risky.”
The second phase of the operation is an attempt to stifle the crypto industry by restricting access to on- and off-ramps. According to Cooper&Kirk, “In back rooms of banks across the country, bank examiners explained that financial institutions that continue to serve customers labeled ‘disreputable’ by federal regulators will suffer the consequences.”
According to the law firm, one of the first actions taken was to allow the Biden administration’s Office of the Comptroller of the Currency (OCC) to “ensure equitable access to banking services to several industries, including debt collection, that were previously blocked under the Obama-era controversial program ‘Operation Choke Point. . that rescinded a rule designed to ‘ensure access.’
the Cooper&.” Kirk’s authors further detail the involvement of the Federal Deposit Insurance Corporation (FDIC) on April 7, 2022. At that time, the FDIC issued a letter to all agencies under its supervision, requesting information about their interest in servicing the crypto industry and about banks already engaged in this type of business. Cooper&Kirk’s white paper argues that Operation Chokepoint 2.0 is illegal and unconstitutional.
“Operation Chokepoint 2.0 violates the Fifth Amendment to the Constitution and deprives corporations of their constitutional rights to due process.” The authors of the paper explain.” Operation Choke Point 2.0 “violates the Fifth Amendment to the Constitution and deprives corporations of their constitutional right to due process.
