“We share your view that law abiding businesses should not be targeted simply for operating in an industry that a particular administration might disfavor,”įrom a letter to House Judiciary Chairman Bob Goodlatte, by Assistant Attorney General Stephen Boydīefore we delve into the idea of an “Operation Chokepoint 2.0” aimed at crypto, one question arises. At the urging of Republican lawmakers, the Justice Department ended the shadowy operation. This points to a rerun of Operation Chokepoint, which aimed to debunk online casinos during the Obama admin. “ This was just a way to tell people, ‘We don’t want you dealing with crypto,’” One of the bank’s board members, Barney Frank of the Dodd-Frank Act, openly said that Signature was solvent, implying that this message was sent by regulators. The FDIC’s seizure of Signature Bank, in the shadow of SVB, is particularly controversial.

This included the SEC’s approval of FTX.US’ stake in IEX, an SEC-regulated exchange.įTX founder Sam Bankman-Fried assuring Congress that his business model is transparent unlike financial market pre-2008 crash.

Under Gary Gensler, former Goldman Sachs banker, the SEC missed multiple red flags as Sam Bankman-Fried positioned himself to influence crypto legislation. The bank was forced to sell securities at a loss to pay back the prematurely recalled $4.3 billion loan to the Home Loan Bank of San Francisco, the second-to-last lender of last resort (the Fed is the first).įurther, Silvergate’s bank run that necessitated the loan was sparked by the FTX crash itself. The latter two collapsed under suspicious circumstances, as Silvergate suffered a $1 billion net loss in Q4 ‘22. Simultaneously, the digital asset space lost three key banks: Silicon Valley Bank as VC/crypto facing, and Silvergate and Signature banks directly providing fiat rails to crypto companies. Crypto-Friendly Banks Shut DownĪt this time of shaken banking confidence, a new crisis cluster is emerging. However, in the middle of the US banking crisis, Bitcoin’s differentiation from ‘crypto’ is again manifesting, poised to return to pre-Terra price levels. Moreover, they became commonly cited by legislators and regulators alike. In broader terms, these piled-up crises in a single year eroded confidence in the crypto space. Likewise, when the FTX exchange crashed in November, Bitcoin fell by -29%. When Terra (LUNA) collapsed in May, followed by Celsius, Bitcoin plummeted by -31% despite not having direct ties to this DeFi niche.

However, even at elevated maturity levels, we saw similar impacts last year. The crypto space maturity was at a very low level, as Bitcoin’s market cap held at just ~$7 billion, an altcoin’s market cap today. Gox collapsed, the price of Bitcoin fell by -36%. Gox was the equivalent of Binance as the world’s largest Bitcoin exchange. In what light should investors view them given the ‘ Operation Chokepoint 2.0’ revelations and the alleged “war” on crypto? Crypto Busts Eroded Confidence in SectorĬrypto space is no stranger to steep price collapses. Multiple news stories have simultaneously emerged about the world’s largest crypto exchange – Binance.

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