Kamala Harris has given cryptocurrency fans little to be hopeful about — despite some of the milquetoast rhetoric from her supporters.
The Federal Reserve’s enforcement action against a crypto-friendly bank shows that Operation Choke Point policies may still be on the table. The enforcement action also undermines the idea that Harris would bring a change of pace for U.S. cryptocurrency policy should she win the presidential election.
The news broke on Sept. 4 when the Federal Reserve issued a cease and desist against United Texas Bank due to “significant deficiencies related to foreign correspondent banking and virtual currency customers, specifically risk management and compliance with … the Bank Secrecy Act.” To get back into compliance (and the Federal Reserve’s good graces), United Texas Bank was ordered to undertake a comprehensive plan spanning everything from ensuring the bank has adequate staffing to ensuring those staff members verify the identity, source of wealth, and business activities of all customers.
Dan Spuller, the Blockchain Association’s head of industry affairs, was quick to point out that the Federal Reserve’s enforcement actions appear to be only the latest of Choke Point 2.0 policies under the Biden administration. Referring to the original Operation Choke Point where the U.S. government pressured banks to refuse service to politically controversial (yet legal) businesses like gun shops and cannabis dispensaries, the term “Choke Point 2.0” has come to refer to more recent government efforts to choke off cryptocurrency-related businesses.
