In early 2023, Nic Carter published a report on Operation Choke Point 2.0, aimed at restricting banking operations with cryptocurrency companies. Recent testimony from former Silvergate chief administrative officer Elaine Hetric has provided new information regarding the role of financial regulators in this process.
Testimony from Silvergate Executive
Elaine Hetric, former chief administrative officer of Silvergate, has provided new data in her declaration for the bank’s bankruptcy case. This information indicates pressure from the Federal Reserve Bank of San Francisco, which demanded that several banks, including Silvergate, Signature Bank, and Silicon Valley Bank, reduce their cryptocurrency deposits by 15%.
Nic Carter’s Report Corrections
In a discussion on platform X, published on September 20, Nic Carter noted that he had previously mistakenly attributed these demands to the Federal Deposit Insurance Corporation (FDIC). New data from Hetric confirmed his claims about regulatory pressure on banks to reduce their cryptocurrency transactions, which contributed to Silvergate's bankruptcy.
What is Operation Choke Point 2.0
Operation Choke Point 2.0 is an initiative aimed at preventing banks from interacting with cryptocurrency companies. Regulators such as the Federal Reserve, the FDIC, and the Office of the Comptroller of the Currency (OCC) issued warnings about the risks for banks working with cryptocurrencies. This led to many financial institutions refusing to collaborate with cryptocurrency firms, causing significant losses for these banks.
The new data provided by Nic Carter and confirmed by Elaine Hetric continues to shed light on the pressure placed on banks working with cryptocurrencies. These points underscore the complexities and obstacles the crypto industry faces in interacting with the traditional financial system.
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