The redacted Federal Deposit Insurance Corporation report detailing its internal communications regarding crypto-related bank activities has reignited the call for greater accountability by U.S. financial regulators.
John E. Deaton is an attorney and prominent crypto enthusiast. He was a former Senate candidate. Deaton has called on Congress to look into what he believes to be a coordinated attempt by regulators, to marginalize digital assets through "Operation ChokePoint 2.0."
The documents, first released through a court order to publicly traded crypto exchange Coinbase in November, outline FDIC directives advising banks to pause crypto-related services while under review.
Deaton is among the critics who claim that the directives are an attempt to limit access to the essential infrastructure of finance, which could stifle lawful business in the sector.
“What we’ve learned thus far suggests coordinated, multi-agency action driven by political agendas rather than sound policy or law,” Deaton Twitter Saturday.
Deaton who failed to challenged Senator Elizabeth Warren as Massachusetts’ 2024 senator Senate Race On a crypto-friendly platform, ChokePoint 2.0 was described as having implications that transcended the crypto industry.
“This isn’t just a fight for crypto,” Deaton said. “It’s a fight against the erosion of institutional integrity and the unchecked power of unelected bureaucrats.”
Warren, who has been vocally critical of crypto, was reelected with a large margin. This means that she will continue to have a major influence on the direction financial policy in the United States. Deaton has also continued to advocate, promising to conduct an investigation on what he believes is overreaching regulatory practices.
Deaton argues that the FDIC report outlines actions which could create a precedent dangerous by allowing government agencies to restrict innovation, and selectively enforce law without any oversight.
Custodia Bank sued the Federal Reserve for denying it a master bank in a similar dispute.
Deaton’s labeling of Custodia is pivotal. It warns that the case highlights the growing influence regulatory agencies have over private businesses.
FDIC has justified its practices of oversight by stating that it is necessary to assess the risks associated with volatile markets.
Deaton, however, argues that new evidence indicates political motives could be behind some regulatory action rather than adhering to sound policy.