According to Nic Carter, co-founder of venture firm Castle Island and crypto intelligence firm Coin Metrics, the alleged strategy involves isolating the traditional financial system from the cryptocurrency market by relying on “multiple agencies to discourage banks from dealing with crypto companies.” The goal of this strategy is to drive crypto companies to “completely unbanked”. This strategy aims to isolate the traditional financial system from the cryptocurrency market.

“Regulators intimidate and blackmail bank leaders behind the scenes, then issue public ‘advice’ stressing that banks are still free to withhold CRYPTOCURRENCIES or serve cryptocurrency customers. In fact, they are not at all free to act this way in any way.

On Jan. 3, the Federal Reserve, FDIC, and Office of the Comptroller of the Currency issued a joint statement warning of the risks of banks engaging in cryptocurrency and encouraging them to refrain from doing so. due to “safety and soundness” concerns. This event is among other recent regulatory developments. In the same month, Binance announced that it will no longer execute any US currency transactions that are less than $100,000 due to a new policy implemented by Signature Bank.

Signature Bank announced in December 2022 that it intended to restrict the number of cryptocurrency services it offered, refund customers’ money, and terminate their accounts. Due to liquidity concerns caused by the bear market and the collapse of FTX, the bank is said to have borrowed nearly $10 billion from the US Federal System of Home Loan Banks in the last quarter of 2022.

“Banks are reconsidering whether or not it is worth continuing to provide these services in light of the potential risks.”

According to comments made by Coinbase CEO Brian Armstrong on Twitter, another focus for US authorities appears to be a ban on cryptocurrency staking services for retail consumers. Staking is a method that allows cryptocurrency investors to place their digital assets under the control of a smart contract in exchange for incentives and passive income.

The methods used by the US authorities are not new. Operation Choke Point was a regulatory program implemented by the federal government in 2013 that focused on a variety of “high risk” sectors, as well as increasing the level of supervision of financial institutions that provide services to these types of businesses.

Influences on crypto companies