The recent regulatory action taken by the US Federal Reserve against Customers Bank has raised concerns within the crypto industry. The Fed’s move was prompted by suspicions that the bank had violated several key regulations, including the Bank Secrecy Act, Anti-Money Laundering laws, and Office of Foreign Assets Control (OFAC) regulations due to its involvement with digital assets. Customers Bank has been mandated to enhance its oversight, risk management, and compliance measures within a 60-day timeframe, which includes improving board oversight, BSA/AML compliance, and OFAC adherence.
Tyler Winklevoss, the co-founder of Gemini, has expressed his belief that Operation Chokepoint 2.0 is still active and affecting the crypto industry. He argues that the recent enforcement action by the Fed has centralized decision-making, placing the Fed as a direct gatekeeper for crypto companies seeking new bank accounts. This centralized approach removes discretion from individual banks, giving the Fed significant power in determining which companies can access banking services. Winklevoss warns that this could have serious implications for the industry as a whole.
Winklevoss also cautions that the current regulatory measures may just be the beginning, suggesting that Vice President Kamala Harris winning the upcoming election and Elizabeth Warren remaining a Senator could lead to even harsher actions against the crypto industry. He describes the Fed’s current enforcement actions as merely a prelude to potentially more severe measures in the future. Winklevoss believes that the Biden-Harris administration’s anti-crypto policies could pose a significant threat to the industry if they continue for another four years.
The ongoing developments related to Operation Chokepoint 2.0 highlight the challenges faced by the crypto industry in navigating regulatory landscapes. The actions taken by regulatory bodies like the Federal Reserve can have far-reaching consequences, impacting the ability of crypto companies to access essential banking services. As stakeholders continue to monitor these developments, it is crucial to consider the potential long-term implications of such regulatory actions on the overall health and growth of the crypto ecosystem.