Paul Grewal, Chief Legal Officer at Coinbase, said that newly unredacted letters from the Federal Deposit Insurance Corporation (FDIC) reveal a coordinated effort to stifle cryptocurrency activities. Grewal made this statement in a January 3 post on X.
"We finally got the unredacted OCP 2.0 letters from @FDICgov. It took a Court order but you can now read them for yourself below," said Grewal. "They show a coordinated effort to stop a wide variety of crypto activity. Everything from basic BTC transactions to more complex offerings."
According to CCN, "Operation Choke Point 2.0" refers to the belief that regulators such as the Department of Justice (DOJ), FDIC, Office of the Comptroller of the Currency (OCC), Financial Crimes Enforcement Network (FinCEN), and Securities and Exchange Commission (SEC) are employing various methods to limit cryptocurrency businesses' access to financial services. This is perceived as a continuation of the original Operation Choke Point, which targeted industries deemed high-risk, such as the marijuana industry. Regulatory pressure on financial institutions is believed to discourage them from engaging with cryptocurrency businesses, despite the absence of a formal program under this name.
Paul Grewal's post
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Appearing on CNBC in October, Brad Garlinghouse, CEO of Ripple, described Citibank's termination of his account as part of "Chokepoint 2.0." He said, "Chokepoint 2.0 is the crypto industry and individuals within the crypto industry are being debanked." Garlinghouse highlighted a growing trend where financial institutions sever ties with cryptocurrency businesses and individuals.
Garlinghouse further said on CNBC that he received a five-day notice from Citibank to close his account, which had been in good standing for over 25 years. He said, "I got a call from one of the major banking institutions I had an account with for 25 years, and they said you have five days to move your money." His experience reflects challenges faced by cryptocurrency companies often classified as high-risk by banks and regulators.
Paul Grewal serves as Chief Legal Officer at Coinbase Global, Inc., overseeing legal matters, compliance, global intelligence, and government relations. He previously held positions as Vice President and Deputy General Counsel at Facebook and served as a United States Magistrate Judge for the Northern District of California. Grewal was also a partner at Howrey LLP and holds a Juris Doctor degree from the University of Chicago Law School and an SB from MIT according to information available on the Practicing Law Institute website.
