The Bitcoin Layer
Operation Chokepoint 2.0: The Fed's Secret War on Crypto with Caitlin Long
Oct 3, 2024
Caitlin Long, a crypto banking expert, joins the discussion to decode the implications of Operation Chokepoint 2.0, revealing how government actions are undermining the crypto sector. She highlights the banking lobby's influence on regulations and the fragility of traditional finance. Conversations dive into the contrasting treatment of big and small banks, the risks of integrating crypto with legacy systems, and the emergence of offshore dollar markets. Long also calls out key political figures for their roles in targeting the crypto industry.
58:18
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Quick takeaways
- Operation Chokepoint 2.0 reflects a manipulation by regulators to undermine crypto banks, revealing the fragility of the traditional financial system.
- The selective regulatory environment highlights a bias favoring larger banks over smaller crypto entities, compromising fair competition and industry integrity.
Deep dives
Impact of Operation Choke Point 2.0
Operation Choke Point 2.0 is largely viewed as a strategic initiative connected to the Federal Reserve, with Michael Barr playing a pivotal role. Following the collapse of FTX, Barr and the Fed took measures that seemed aimed at stifling crypto banks, which ultimately resulted in the bank run that affected institutions like Silvergate. It was revealed that Silvergate's closure was not due to insolvency but rather the Fed's ultimatum, which forced the bank to either diversify its operations or shut down. This situation led to significant losses for the FDIC and increased fees for deposit insurance affecting every American, highlighting the fragility of the financial system and the far-reaching consequences of regulatory actions.
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