The Fed’s Power Grab: Operation ChokePoint 2.0 Still in Full Swing
Yesterday, August 8th, a 13-page enforcement action was issued against Customers Bank, one of the few remaining crypto-friendly banking institutions in the United States. The move has raised significant concerns about the future of financial services available to the bitcoin and cryptocurrency industry.
The enforcement action is characterized by vague language and complex requirements that obscure its true impact. A close reading of the document reveals a concerning development: the Federal Reserve now requires Customers Bank to provide 30 days’ advance notice before establishing any new banking relationship with a cryptocurrency company. This effectively grants the Fed a gatekeeping role, allowing it to determine which companies can access essential banking services. Such centralization of decision-making power is a departure from the principles of a free market, where banks should be able to make independent decisions based on their own assessments.
The order itself is frustratingly unclear, with the Fed citing “significant deficiencies” in Customers Bank’s recent examination but failing to provide specific details. Instead of offering transparency, the Fed seems to be using this as a pretext to exert control over which industries a bank can serve. The requirement for Customers Bank to overhaul its policies within 60 days could have been handled through a request rather than an enforcement action, but the intent appears to be more about establishing a public record that justifies further regulatory control.
Some may argue that the bank can still serve crypto companies with the Fed’s approval, but it remains uncertain how many of these applications will actually be granted. The timing of this action, with an upcoming election, raises concerns that the Fed’s approach may become even stricter depending on the political climate.
This enforcement action should serve as a wake-up call for the cryptocurrency community which has recently taken up political involvement. The Fed’s actions reiterate a broader agenda of control over an industry that challenges traditional financial power structures. Prominent figures in the bitcoin and crypto space have taken to X to voice their concerns, emphasizing that this is not just a battle for the future of digital assets, but for financial freedom itself.
In conclusion, the Federal Reserve’s recent actions are a reminder that the fight for financial autonomy is ongoing. The enforcement action against Customers Bank represents an attempt to exert control over an industry built on principles of decentralization and individual empowerment. The bitcoin and crypto communities must remain vigilant and united in defending the future of financial sovereignty.
