Bitcoin Can’t Be Stopped – Regulators Just Want To Play Whack-a-Mole: Caitlin Long
The founder of crypto-friendly Custodia Bank, Caitlin Long, said regulators would be “playing Whack-a-Mole” with problems if they continued to suppress Bitcoin (BTC).
War on crypto
Recently, a series of regulatory enforcement actions have raised suspicions of a coordinated attack on the US crypto industry. Most recently, the SEC issued Coinbase a Wells notice on March 22.
Bitcoin bull Anthony Pompliano described “Operation Chokepoint 2.0” as a program that circumvents laws and democratic due process to enforce political views. He admitted that there had been no official confirmation of such a program, nor did he expect an acknowledgment of its existence from officials.
“It refers to an Obama-era program that used the banking system as a way to essentially implement policy views or legislation without having to go through the legislative process.”
Earlier Federal Deposit Insurance Corporation (FDIC) chairman William Isaac — who served between 1981 and 1985 — said Operation Chokepoint (1.0) was not about preventing fraud and protecting consumers. Instead, it was a proxy attack on industries “considered undesirable.”
“To target entire industries deemed undesirable by putting regulatory pressure on the banks that serve them.”
Partner in Castle Island Ventures, Nic Carter, was the first to connect the dots. He said “a new operation Choke Point type operation” has been in effect since the start of 2023 – adding that it is a deliberate attempt to stifle the crypto industry.
“It’s a well-coordinated effort to marginalize the industry and cut its connection to the banking system – and it’s working.”
Custodia is rejected
On January 27, Custodia Bank’s application to become a member of the Federal Reserve System was rejected. Later that day, the Kansas City Fed rejected Custodia’s main account application.
A master account provides access to the Fed’s wholesale payment network without the need for a bank to act as an intermediary.
Speaking to Pompliano, Long said before the rejections, Custodia was told to withdraw their applications or they would be “voted down.” Likewise, the fact that the two rejections happened in quick succession is evidence of coordination, Long said.
Furthermore, since then, she pointed out that the crypto industry has had a “cover” of enforcement actions – making it clear that Operation Chokepoint 2.0 is real.
“We’ve seen it with the actions against Paxos, actions against stablecoin issuers, actions against Kraken between the IRS and the SEC, most crypto exchanges received Wells Notices in early February.
Regulators cannot stop Bitcoin
Responding to Bitcoin “fixing this,” Long said that despite the damage that has been done, recent BTC price increases show that the government does not have the power to shut it down.
She said that regulators and those driving the anti-crypto agenda refuse to accept that they will lose control over this. Instead of embracing change, they try to keep people stuck “on old technology.”
Fiat and crypto will co-exist, but by forcing US crypto firms abroad, regulators are saving trouble for themselves in the long term, Long said.
“The sad thing is, by pushing it all offshore, they’re going to be playing Whack-a-Mole, and frankly, there’s going to be exposures, probably through correspondent banks, that they didn’t know existed.”
