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Operation Chokepoint 2.0: Winklevoss Twins Warn of Ongoing Crypto Crackdown

TLDR

  • Tyler Winklevoss warns that “Operation Chokepoint 2.0” against crypto companies is ongoing, citing recent Federal Reserve action against Customers Bank.
  • The Federal Reserve found “significant deficiencies” in Customers Bank’s anti-money laundering compliance and now requires 30-day notice for new crypto banking relationships.
  • Winklevoss criticizes the Fed’s action as creating a “choke point” for crypto companies seeking banking services.
  • He calls Vice President Kamala Harris’ proposed crypto “reset” a “scam” and warns of harsher measures if she wins in November.
  • The Winklevoss twins also criticize a new CFTC proposed rule against event contracts, saying it would ban prediction markets and likely be struck down in court.

Gemini co-founders Tyler and Cameron Winklevoss have raised alarm bells about what they see as continued regulatory pressure on the cryptocurrency industry in the United States. Their recent statements highlight concerns about banking access for crypto companies and proposed rules that could impact prediction markets.

Tyler Winklevoss has warned that “Operation Chokepoint 2.0” – a term used to describe alleged efforts by government agencies to restrict crypto companies’ access to banking services – remains “in full swing.”

He points to recent action by the Federal Reserve against Customers Bank, one of the few remaining crypto-friendly banks in the U.S., as evidence of this ongoing crackdown.

The Federal Reserve reported finding “significant deficiencies” in Customers Bank’s anti-money laundering compliance measures. As a result, the bank must now provide 30 days’ advance notice to the Federal Reserve before entering into any new banking relationships with cryptocurrency companies.

Winklevoss criticized this measure, arguing that it effectively makes the Federal Reserve “a direct gatekeeper standing between crypto companies and their ability to get a new bank account.” He contends that this centralization of decision-making power over banking relationships goes against principles-based regulation and creates a “choke point” for the industry.

“This is not how principles-based regulation is supposed to work,” Winklevoss stated. He argued that banks should have the autonomy to decide which clients to serve, with these decisions “decentralized across the entire banking industry” rather than centralized under the Federal Reserve’s control.

The Gemini co-founder also took aim at Vice President Kamala Harris’ proposed “reset” of the government’s approach to cryptocurrency regulation. Winklevoss dismissed this as a “scam,” suggesting that the enforcement action against Customers Bank reveals the true nature of the administration’s stance toward the industry. He warned that if Harris wins the election in November, “the gloves will come off” in terms of regulatory pressure on crypto companies.

CTFC Event Contracts

Tyler and Cameron Winklevoss have voiced strong opposition to a new rule proposed by the Commodity Futures Trading Commission (CFTC) regarding event contracts.

The proposed rule would effectively ban all event contracts in the U.S., including those traded on prediction markets like Polymarket.

Cameron Winklevoss defended the importance of decentralized prediction markets, stating that they “provide valuable information on future events that is rooted in financial accountability.” The twins argue that the CFTC’s proposed ban is overreaching and likely to be struck down by the courts.

“There is nothing thoughtful about a blanket ban on markets that have been employed for decades in one form or another and have proven extremely reliable tools for forecasting future events,” Cameron Winklevoss said. He cited the recent Supreme Court ruling in Loper Bright Enterprises v. Raimondo as evidence that regulatory agencies cannot expand their power through rulemaking in this manner.

The CFTC, for its part, has stated that the proposed change is intended to protect the public interest by specifying which types of contracts fall under the Commodity Exchange Act.

The proposal particularly scrutinizes event contracts involving “gaming,” which includes bets on political contests, award shows, and athletic competitions.

The post Operation Chokepoint 2.0: Winklevoss Twins Warn of Ongoing Crypto Crackdown appeared first on Blockonomi.

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