Originally published on: November 30, 2024
In a recent statement, Ripple’s chief technical officer, David Schwartz, criticized the government’s reliance on indirect regulation and its impact on the crypto industry. Schwartz argued that Operation Chokepoint 2.0, a debanking operation targeting crypto businesses, undermines the rule of law for four key reasons.
According to Schwartz, debanked entities often resort to evasive tactics, such as switching service providers or going underground, to avoid surveillance and sanctions. This, in turn, undermines due process, freedom of speech, and protection against unlawful search and seizure. Schwartz emphasized the importance of using lawful processes to regulate businesses rather than pressuring banks to cut off certain entities.
Venture capitalist Marc Andreessen highlighted that more than 30 tech firms fell victim to Operation Chokepoint 2.0, with prominent tech founders sharing their debanking experiences on social media. Frax Finance founder Sam Kazemian and Coinbase CEO Brian Armstrong were among those who spoke out against these actions.
Additionally, Castle Island Ventures partner Nic Carter accused the Biden administration of deliberately targeting Silvergate Bank to stifle the crypto industry. Despite these challenges, industry executives are hopeful that the upcoming Trump administration will bring about a more favorable regulatory environment for crypto businesses.
Looking ahead, experts predict that the crypto industry has four years to grow substantially before becoming too large to shut down. Stay informed on crypto laws and regulations by subscribing to our Law Decoded newsletter for the latest updates every Monday. Join us in navigating the evolving landscape of crypto regulations for your ventures.