Operation Choke Point 2.0, a campaign of regulatory pressure against cryptocurrency firms, has sparked a fresh wave of criticism from notable industry figures, including former Silvergate Bank Chief Technology Officer Chris Lane and entrepreneur David Sacks, recently appointed “ Crypto Czar” by President-elect Donald Trump.
Former Silvergate Bank CTO and Trump’s 'Crypto Czar' David Sacks Speak Out on Operation Choke Point
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Operation Choke Point 2.0 Under Fire from Industry Voices and Trump’s New Crypto Czar
Chris Lane, whose father Alan Lane served as Silvergate’s CEO, reflected on the regulatory scrutiny that led to the bank’s closure. Silvergate wasn’t perfect, Lane noted in an X thread and said it provided services to FTX. However, he claims the bank was “solvent and liquid.” He described how regulatory restrictions imposed in early 2023 significantly limited the bank’s ability to hold deposits for digital asset clients, effectively dismantling its business model.
Lane characterized the experience as akin to being “shot in the back” after regulators initially expressed no objections to the bank’s operations. Silvergate’s SEN network had been a crucial piece of infrastructure for the cryptocurrency economy, supporting seamless transactions for digital asset firms. However, the bank’s ability to navigate regulatory hurdles proved insufficient after the collapse of FTX and a 70% run on deposits. Lane stated:
FTX didn’t kill us; our regulators did.
David Sacks, a venture capitalist and outspoken advocate for cryptocurrency, took to the social media platform X to decry the fallout from these regulatory actions. “There are too many stories of people being hurt by Operation Choke Point 2.0. It needs to be looked at,” he wrote, emphasizing the human and financial cost of aggressive oversight. As Crypto Czar, Sacks might have the chance to dig deep and get to the heart of what really went down.
The term “Operation Choke Point 2.0” has been used by critics to describe what they see as a targeted effort to debank cryptocurrency businesses. This follows a similar initiative under the Obama administration that sought to cut off access to financial services for industries deemed high-risk. While the original program officially ended in 2017, its alleged revival has reignited debates over the role of regulatory agencies in shaping market access.
The events surrounding Silvergate Bank, once a pioneer in cryptocurrency banking, highlight broader concerns about the interplay between innovation and regulation. Proponents of cryptocurrency argue that such measures stifle innovation and harm legitimate businesses, while regulators contend they are necessary to prevent financial crimes and protect consumers.
As the debate over cryptocurrency regulation continues, figures like Sacks have become vocal advocates for transparency and fairness in regulatory practices. Their calls for a reassessment of policies signal a critical juncture for the crypto industry and its relationship with traditional financial (tradfi) institutions. Since Marc Andreessen dropped the story on the Joe Rogan podcast, curiosity about Operation Choke Point 2.0 has been steadily building.
