Ripple chief technical officer David Schwartz recently joined the list of tech founders speaking out against Operation Chokepoint 2.0 — a government-run debanking operation against the crypto industry. Schwartz said the government is “addicted to indirect regulation” and laid out four reasons why de-banking undermines the rule of law.
Schwartz argued that debanked entities switch service providers or take their funds underground — thereby evading surveillance and sanctions control altogether. The CTO also said de-banking undermines due process, freedom of speech, and the right against unlawful search and seizure. Schwartz wrote:
“Our government has become addicted to indirect regulation precisely because of these evils. It is cheaper and easier to pressure someone else to punish me than to charge me with a crime and give me due process, but the government ought not to punish people without giving them due process.”
“It is easier to pressure banks to cut off disfavored businesses than to make that business illegal,” The CTO continued before imploring the government to use lawful and above-board processes to regulate businesses.
Related: FDIC chair, ‘architect of Operation Chokepoint 2.0’ Martin Gruenberg to resign Jan. 19
Industry founders recount government debanking operation
According to venture capitalist Mark Andreesen, more than 30 tech firms were victims of Operation Chokepoint 2.0, and tech founders recently took to social media to share their debanking experiences.
The list of figures speaking out included Frax Finance founder Sam Kazemian, who claimed that JPMorgan Chase debanked him in December 2022.
Coinbase co-founder and CEO Brian Armstrong also petitioned the government for records relating to Operation Chokepoint 2.0 via the Freedom of Information Act (FOIA) and is currently compiling those records.
In September 2024, Castle Island Ventures partner Nic Carter revealed that the Biden administration deliberately killed Silvergate Bank — a major institution for crypto banking — in an effort to destroy the crypto industry. “I believe Silvergate could have survived its drawdown — and was on a path to do so,” Carter said.
However, Industry executives remain optimistic that the incoming Trump administration will reverse years of regulatory hostility toward the crypto industry.
Magazine: Crypto has 4 years to grow so big ‘no one can shut it down’: Kain Warwick, Infinex
