Several crypto industry figureheads met with White House officials on Thursday morning to attempt to mend relations between the emerging fintech sector and the U.S. Democratic Party, according to FOX Business.
The meeting reportedly grew tense when the government denied the industry’s claims that there was a coordinated effort to cut off crypto firms from the banking system – a conspiracy widely referred to as “Operation Chokepoint 2.0.”
Crypto’s Banking Troubles
As reported Thursday, Deputy Treasury Secretary Wally Adeyemo told crypto attendees that regulators weren’t actively trying to cut off crypto from the financial system.
In response, one of the crypto executives in attendance asked for a show of hands for whose crypto companies had been denied banking access due to White House policies. Almost all industry members raised their hands – a group including Mark Cuban, Anthony Scaramucci, alongside representatives from Coinbase, Kraken, Uniswap, and other firms.
“Executives didn’t hold back on telling the administration reps how much damage they’ve done to the crypto industry and to the Democrat Party with their actions against digital assets,” said one attendee, according to FOX. “They basically just got yelled at.”
Crypto’s banking troubles date back years now, beginning in earnest after the collapse of FTX, which kicked regulatory clampdowns against blockchain firms into high gear.
Nic Carter, partner at Castle Island Ventures, published a blog post titled “Operation Choke Point 2.0 Is Underway” in February that detailed some of these earlier efforts. One such action included guidance from the OCC, FDIC, and Federal Reserve discouraging banks from servicing crypto companies.
Just a month later, crypto-friendly banks including Silvergate Bank, Signature Bank, and Silicon Valley Bank were all forced to close their doors. The coincidental fall of all three firms – which sent crypto firms struggling for banking lifelines abroad – was interpreted by the bank’s own leaders as sending a strong “anti-crypto message.”
“Harris admin flunkies try and pretend there’s no systematic unbanking – meanwhile every crypto representative on the call says they’ve been unbanked. Reset going great!” said Nic Carter in response to the news.
Will Democrats Come Around On Crypto?
Despite the tensions at Thursday’s meeting, some crypto moguls are optimistic in seeing the Harris administration at least try to productively engage with them.
“My colleagues in the crypto space understandably want action now, but that’s not how things work in Washington,” said Anthony Scaramucci, founder of SkyBridge Capital. “ I think we’re making steady progress.”
Coinbase CLO also came away with hope, calling Kamala Harris the “perfect candidate to be a strong new face for crypto and make a break with the past.”
Still, many remain skeptical that the administration’s kind gestures will translate into proper policy actions. Gemini co-founder Tyler Winklevoss, for example, questioned why Harris herself had not appeared at the virtual roundtable.
Doubt grew further on Thursday with the revelation that Customers Bancorp had been hit with a Federal Reserve enforcement action, which now forces the bank to give the Fed 30 days advance notice before entering any new relationship with a digital assets company.
“The Fed confirmed that Operation Choke Point 2.0 remains in full swing, provided valuable insight into how it works, and verified that the Harris crypto “reset” is a scam,” said Winklevoss.