From New York to Washington, U.S. anti-crypto-power is being fully liquidated

Author: jk, Odaily Planet Daily

With the Trump administration coming to power, the top regulators who once dominated the U.S. anti-cryptocurrency policy are now facing a full liquidation. Major financial regulators such as the Securities and Exchange Commission (SEC), Federal Deposit Insurance Corporation (FDIC), and the Commodity Futures Trading Commission (CFTC) are experiencing large-scale personnel adjustments and policy shifts.

It can be seen that Washington's regulatory attitude is undergoing fundamental changes.

SEC: Gary Gensler teams all leave, pro-crypto people come in, law

enforcement procedures change

SEC, new officials take office three times

At the SEC headquarters at 100 F Street, Washington, DC, the atmosphere is quietly changing. With Trump taking office, Gary Gensler resigned the same day, and the pro-crypto-mark Uyeda became acting chairman, temporarily acting on the role of chairman before the nomination of new chairman Paul Atkins. This building with beautiful glass curtain walls is no longer a public enemy of the crypto industry, but has become a truly friendly regulatory body.

For Mark Uyeda's profile and pro-crypto stance, you can read this article " How long will it take to expose the new leadership team of US crypto regulating supervision from the beginning to implementation? 》

On February 5, local time in the United States, two people familiar with the matter revealed that the US SEC is currently requiring its lawyers to obtain senior approval before officially launching the investigation. The new requirement stipulates that law enforcement officers must obtain permission from politically appointed committee members before issuing subpoena, requesting documents and compulsory certificates. There are currently three members: Acting Chairman Mark Uyeda, Hester Peirce and Caroline Crenshaw. During the last administration, the SEC only needed approval from two law enforcement supervisors to formally initiate an investigation, and law enforcement officers could continue informal investigations without the approval of the Commissioner, including sending a request for information.

At the same time, I believe many readers already know that SEC Acting Chairman Mark Uyeda has set up a new cryptocurrency working group, led by Hester Pierce, a crypto-friendly committee member and known as the "crypto-mother". The ultimate goal is to provide regulatory clarity and propose A clear set of cryptocurrency regulatory frameworks (similar to the EU's MiCA). This news follows Acting Chairman Mark Uyeda appointed Landon Zinda, policy director at former crypto advocacy group Coin Center, to join the committee as his legal counsel and senior advisor to the cryptocurrency task force.

On the website of the SEC Cryptocurrency Working Group, the SEC's support attitude is very obvious, and even provides crypto people's email address to contact the SEC directly

Source: SEC official website

Hester Peirce said: “The Cryptocurrency Working Group is considering recommending the SEC to take action to provide temporary forward-looking and retroactive relief for token issuance (compared to previous retrospective enforcement by the SEC), where the issuing entity or other willing to assume responsibility. The entity provides certain specific information and remains updated and agrees not to challenge the SEC's jurisdiction in cases of allegations of fraud in connection with the purchase and sale of assets."

Liquidation is coming? Anti-cryptographers are marginalized

Odaily previously reported that almost all senior legal officials working under Gary Gensler, including those in the law enforcement and the General Counsel’s Office, have left the office, and it can be speculated that his entire team has left. Previously, SEC's chief economist Jessica Wachter, chief accountant Paul Munter and general counsel Megan Barbero have also left.

What should people do if they don’t leave?

The SEC has reportedly reappointed Jorge Tenreiro, former deputy director of crypto assets and networking, to his Computer Systems Management (IT) division. Tenreiro has worked at the SEC for more than 11 years, and according to his LinkedIn information, he was initially an executive attorney before serving as head of the agency’s cryptocurrency law enforcement from October 2022 to November 2024.

Tenreiro has been involved in several SEC enforcement cases against cryptocurrency companies, such as lawsuits against Ripple and Coinbase. The SEC has undergone a major shift in position since President Trump took office, thus reducing the size of its crypto law enforcement.

FDIC: Regulatory hostility disappears completely, crypto banking services

may return

What is FDIC?

FDIC (Federal Deposit Insurance Company) is an independent agency in the United States responsible for insuring bank deposits, ensuring that depositors can receive up to $250,000 in compensation when the bank goes bankrupt. The FDIC regularly reviews the bank's assets and liabilities status, assesses risks, prevents misoperation, and takes corrective measures when problems are found, and may even close banks that are seriously violated or insolvent. In addition, the FDIC is responsible for taking over and liquidation when the bank goes bankrupt, protecting the interests of depositors, and maintaining the security and stability of the financial system. If a bank goes bankrupt, the FDIC usually arranges another bank to take over the deposit or directly pay the depositor, making the banking system safer and more reliable.

Simply put, FDIC is the National Bank Insurance of the United States, ensuring the safety of consumers' deposits in banks. Previously, when Silicon Valley Bank went bankrupt, the FDIC was responsible for the aftermath and subsequent arrangements.

Why is the national banking and insurance related to the crypto industry?

Because of the regulatory function of FDIC, FDIC was actually not a good name for the crypto industry; FDIC restricted the crypto industry from reaching banks and caused complaints from the entire crypto industry.

Imagine if you open a crypto company or project, you can’t open an account at any major U.S. bank, and you can’t get a loan, and you can’t enjoy the banking services you should enjoy in commercial projects. And this is Operation Choke Point 2.0 (translated as "banning operation" or "bottleneck operation" 2.0), a policy that prohibits crypto projects from enjoying banking services, and FDIC is the main regulatory implementer of this policy. We will talk about this policy soon.

This is not groundless. Anchorage Digital CEO Nathan McCauley said at a "debanking" hearing in the U.S. Senate that although Anchorage Digital is a crypto bank with a federal license, it was still denied services by banks, causing business damage and even layoffs of 20%. McCauley pointed out that between 2021 and 2023, US regulators have gradually pressured banks to stay away from the crypto industry. Several policies jointly issued by OCC, FDIC, SEC, the Federal Reserve have made banks generally reluctant to cooperate with crypto companies, resulting in many crypto companies being unable to Access to basic banking services, some of them were even forced to shut down.

Consensys CEO Joseph Lubin said the company had twice been tried by U.S. authorities to cut off access to the financial system and was a victim of Operation Chokepoint 2.0. In the latest incident, a large U.S. bank (reportedly Wells Fargo) eventually closed its Consensys account after being under pressure from regulators. Lubin revealed that the bank initially tried to delay execution and expressed support for Consensys, but ultimately could not resist the pressure. In addition, Lubin himself was targeted during this liquidation operation.

How is FDIC different today?

And with Trump taking office, the FDIC has also changed.

The Federal Deposit Insurance Corporation (FDIC) recently announced that it is actively reevaluating the regulatory approaches to cryptocurrency-related activities, including withdrawing and replacing the Financial Institution Letter (FIL) 16-2022), providing a compliance path for banking institutions to It participates in cryptocurrency and blockchain-related activities while complying with the principles of security and robustness. The FDIC plans to work with the Digital Asset Markets Working Group established by Trump’s executive order to optimize the regulatory framework.

Travis Hill, acting chairman of FDIC, who criticized FDIC's position as a hindering banks' exploration of blockchain and digital assets, said: "I have been criticizing FDIC's attitude towards crypto assets and blockchain in the past. As I said in March last year, FDIC's Practice 'cause it was widely believed that an institution would not be able to do business if it was interested in anything related to blockchain or distributed ledger technology.'" After taking up the role, Hill initiated all crypto banks related to "After becoming the acting chairman, I directed employees to conduct a comprehensive review of all regulatory communications with banks trying to provide crypto-related products or services," he said.

To improve transparency, FDIC recently released 175 documents detailing its regulation of banks' crypto-related business. This change means that banks can custody customers’ cryptocurrencies and will be insured by the FDIC.

Operation Choke Point 2.0: It is about to end, and participants may be

held accountable and liquidated

How powerful is Operation Choke Point 2.0?

We have just mentioned that Operation Choke Point 2.0 (translated as "banning operation" or "bottleneck operation" 2.0) is a policy that prohibits crypto projects from enjoying banking services. In fact, the scale of this action may be far beyond readers' imagination.

Blockworks describes it like this: If FTX is a butterfly flapping its wings in the Amazon rainforest, then "Operation Choke Point 2.0" is a heavy rain pouring into the US cryptocurrency industry today.

This action was made by Biden White House, Federal Reserve, Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC) (Federal Deposit Insurance Company) and Department of Justice (DOJ, U.S. Department of Justice), together with "influential people in Congress", is committed to depriving the cryptocurrency industry of fiat currency channels to completely kill the industry.

Senators Roger Marshall, Elizabeth Warren and John Kennedy put pressure on Silvergate before Signature Bank significantly cut crypto-related deposits in December 2023. In January 2024, the FDIC, OCC and the Federal Reserve jointly stated that banks were “strongly discouraged” in support of cryptocurrency operations, followed by Metropolitan Commercial Bank’s complete shutdown of cryptocurrency operations.

At the same time, crypto companies trying to master their own fiat currency channels also encountered resistance. Federal Reserve officially rejected Custodia (formerly Avanti)'s application to join the Federal Reserve system at the end of January, which has been delayed for more than two years. Although Anchorage became the first national trust bank to be qualified for approval in 2021, Paxos and Protego have not been approved. The government's citation banking as "high risk" has four major negative effects, including FDIC raising insurance premiums, Federal Reserve lowers capital ratios (limiting overdraft capacity), restricted business activities, and a lower regulatory review score (affecting the merger and acquisition capabilities), further exacerbating the isolation between banks and crypto industry.

Moreover, most of the above behaviors are traceless. That is to say, cryptocurrency companies are not only unable to litigate, but may even find evidence at all. Many people who promoted this matter hid behind the screen and put pressure on them secretly.

All this has been reversed since Trump took office.

What is the attitude of the US regulator today?

The U.S. Congress first held a hearing on Operation Choke Point 2.0, inviting people from the crypto industry to describe how they were "bottled". U.S. Rep. Meuser said at the hearing that the Biden administration's Operation Choke Point 2.0 is implemented by regulators and is specifically targeted and debanked in the digital asset ecosystem.

“FDIC pressures banks through private conversations and formal regulatory threats to refuse services to digital asset companies, their employees, and even their customers.

This is a serious abuse of power that not only stifles innovation but also directly harms consumers, preventing them from accessing new, potentially beneficial financial products…

Just yesterday, Acting Federal Deposit Insurance Chairman Travis Hill publicly exposed the Biden administration’s Operation Choke Point activity, resulting in debanking of cryptocurrency businesses across the country… The FDIC has promised to correct this in the future and I will continue Monitor its rectification progress and explore legislative solutions to ensure that such incidents do not occur again.

“Free markets can only thrive when innovation is fully developed. The role of regulators is to protect our financial system – but this should not come at the expense of the development of legitimate enterprises, such as energy companies and cryptocurrency companies.”

Official hearing in the U.S. Congress acknowledges the existence of Operation Choke Point 2.0

Source: YouTube

Readers can take a closer look at the differences in the current official qualitative aspects.

Meanwhile, U.S. federal judge Ana C. Reyes made severe criticism of FDIC's actions in Coinbase's case against Federal Deposit Insurance Corporation (FDIC). The lawsuit stems from Coinbase's attempt to obtain documents from the FDIC sending a "suspension letter" to banks to limit cryptocurrency-related activities, which is evidence of Operation Choke Point 2.0. Judge Reyes noted that the FDIC failed to provide a large number of documents related to Coinbase's previous Freedom of Information Act (FOIA) request and may have destroyed some of the case information.

Ana C. Reyes directly questioned the FDIC at the hearing: "Can you explain why the FOIA request is interpreted in such a narrow way? Its content is obvious and not (restrictively) understanding as you do." For the part The dialogue excerpts are as follows:

Andrew Dober (FDIC lawyer): Yes, Judge, I can—

The Court: No, you can answer my question directly.

Andrew Dober: I do have a statement on these issues, Mr. Judge. FDIC pleads with the court to suspend the case for three weeks—

The Court: No, no. I want you to answer my question now.

Andrew Dober: Because of leadership changes—

The Court: I want you to answer my question now.

Andrew Dober: Yes, Lord Judge. Can you repeat these questions?

The Court: Who has taken such a narrow and illogical interpretation of the FOIA request?

Andrew Dober: My Excellency Judge, I think this is how I understood it at that time- The Court: I didn't ask you how you understood it, but who did it. This interpretation is almost ridiculously narrow. Who is it?

"It's shocking to see a federal judge harshly denounce a federal agency's lawyer in such a way," said Scott Johnsson, a partner at VBCapital, according to The Block.

Judge Reyes not only plans to subpoena the FDIC staff’s work permit in mid-February, but also warned that “life will become very, very unpleasant for the FDIC” if the FDIC does not cooperate. She further questioned whether the FDIC had taken legally required document retention measures and pointed out that Andrew Dober could face "serious sanctions."

And liquidation is coming soon. U.S. Senator Cynthia Lummis said the U.S. Senate Banking Committee today found the first solid evidence of Operation Chokepoint 2.0. She said, “Rest assured that the Digital Assets Subcommittee will find the parties involved and hold them accountable.”

CFTC: Reorganize law enforcement agencies

On February 5, 2025, Caroline Pham, acting chairman of the U.S. Commodity Futures Trading Commission (CFTC), announced that the agency has reorganized law enforcement to focus more on combating fraud and to stop replacing regulatory functions with law enforcement actions. This reform aims to optimize resource allocation, improve law enforcement efficiency, and ensure market integrity.

Under former Chairman Rostin Behnam, CFTC law enforcement has set up several working groups to regulate insider trading, cybersecurity and emerging technologies, and environmental fraud. After this reorganization, the CFTC streamlined the number of law enforcement working groups from multiple to two, namely the Complex Fraud Working Group and the Retail Fraud and General Law Enforcement Working Group.

Among them, the Complex Fraud Working Group will be responsible for handling complex fraud and market manipulation cases involving all asset classes, covering the entire process from investigation to litigation. The Retail Fraud and General Law Enforcement Working Group focuses on combating retail market fraud and other general law enforcement matters.

Acting Chairman Pham pointed out in his statement that the adjustment aims to stop “regulation by Enforcement” and improve organizational efficiency, allowing CFTC to combat market fraud and misconduct more accurately than impose excessive compliance burdens. . The CFTC announcement further emphasized that the new structure will more effectively prevent fraud, manipulation and market abuse, ensure market fairness, and at the same time strengthen supervision and governance of law enforcement actions, prevent override of supervision, and improve compliance standards for law enforcement consistency and due process.

Why is this statement important? The first thing to know is that CFTC has been involved in cases such as Binance and Coinbase, and is one of the more active US crypto-regulators. Because of the commodity attributes of cryptocurrencies (such as gas fees), the CFTC believes that the crypto industry should be under its supervision. At the same time, law enforcement and supervision were a common strategy used by the SEC before, namely, a strategy that "you can do whatever you want, but if something goes wrong, you will be fined."

However, this strategy often does not provide any regulatory clarity: a typical example is Coinbase, which was quickly approved by the SEC when Coinbase initially IPOed and did not provide any definition of attributes for cryptocurrencies, but a few years later, Coinbase filed a lawsuit, citing cryptocurrency as an unregistered securities, and Coinbase provides a trading platform for unregistered securities. This capricious regulatory attitude has brought great uncertainty to the US crypto industry, which is why the CFTC has made it clear that bans law enforcement and supervision is a huge benefit to the crypto industry.

David Sacks: The New Crypto Tsar's Action

David Sacks, the head of cryptocurrency and AI at the White House, emphasized at a recent press conference to promote the United States to become a leader in the digital asset field and called for a clear regulatory framework as soon as possible. He announced that the Senate and the House will work together to formulate cryptocurrency legislation to address the uncertainty faced by the industry for a long time. Senator Bill Hagerty proposed the GENIUS stablecoin bill, hoping to provide legal support to this market by regulating the stablecoin issuance procedures. Sacks believes that stablecoins can not only consolidate the dominance of the US dollar in the international market, but may also bring trillions of dollars in US Treasury bond demand, thereby reducing long-term interest rates and enhancing the stability of the US financial system.

At the press conference, Senator Tim Scott, chairman of the Senate Banking Committee, proposed the goal to get the stablecoin and digital assets bill passed through Congress within 100 days and sent to the president for signature. House Financial Services Committee Chairman French Hill said the new version of the Digital Assets Act will be modified on the basis of FIT 21 to make up for previous loopholes, such as the practical feasibility of the SEC in 60 days. The Senate also plans to coordinate FIT 21 to ensure that the bill version can eventually be signed into law by the president.

According to CNBC’s report and interview, Sacks also highlighted the negative impact of debanking on the crypto industry. He pointed out that keeping cryptocurrency-related businesses in the United States will be more conducive to consumer protection because regulators can more effectively monitor market activities when these businesses are located in the United States. He believes that the Bahamas regulatory loopholes have led to the world's largest crypto fraud case (referring to FTX), and the United States should avoid repeating the same mistakes.

He stood with the Senators and Representatives at his first press conference on David Sacks (first right)

Source: Bloomberg

Sacks confirmed that Bitcoin Reserve will be included in the research topic of the White House Digital Assets Task Force and may include seized assets. However, he said the concept of the Sovereign Wealth Fund is different from Bitcoin reserves, and specific policies will be under the responsibility of incoming Finance Minister Howard Lutnick. The Trump administration is exploring the potential role of Bitcoin in the national fiscal system, but the specific plan is still under discussion.

David Sacks demonstrated the attitude of regulation in the United States in one sentence: "The crypto war is over. I look forward to working with you to create a golden age of digital assets."