Trump’s Crypto Czar David Sacks to Investigate Operation Choke Point 2.0

David Sacks, newly appointed by President-elect Donald Trump as the White House AI and Cryptocurrency Czar, has vowed to investigate the controversial Operation Choke Point 2.0.

This alleged regulatory campaign aims to restrict crypto industry access to liquidity, raising concerns about fairness and transparency in U.S. financial oversight. In a statement on X (formerly Twitter), Sacks remarked, “There are too many stories of people being hurt by Operation Choke Point 2.0. It needs to be looked at.”

This response follows claims by Chris Lane, CTO of the now-defunct Silvergate Bank, who blamed regulators—not the FTX collapse—for the bank’s demise. “FTX didn’t kill us; our regulators did,” Lane stated.

Coinbase Sheds Light on Regulatory Actions

Coinbase has fueled the debate by releasing 23 heavily redacted “pause letters” from the Federal Deposit Insurance Corporation (FDIC). These documents allegedly highlight regulatory pressure tied to Operation Choke Point 2.0. In a legal move, Coinbase has filed a court motion seeking unredacted versions of the letters, intensifying scrutiny of the FDIC’s role.

Meanwhile, Rep. French Hill of the House Financial Services Committee has called for an investigation into these practices, emphasizing Congress’s authority to reverse and halt such operations.

The Financial Stability Oversight Council (FSOC) has also drawn criticism for targeting stablecoins, labeling them as risks to financial stability. Caitlin Long, CEO of Custodia Bank, accused the FSOC of forcing banks to sever ties with crypto issuers, further stifling innovation.

Senate Banking Committee Vote Looms

The Senate Banking Committee is set to vote next week on the renomination of SEC Commissioner Caroline Crenshaw, a vocal critic of crypto. If rejected, President-elect Trump will appoint a new candidate, signaling potential shifts in the SEC’s regulatory stance.

Industry leaders, including Coinbase CEO Brian Armstrong, have expressed optimism about Sacks’ leadership. “Sacks is a great pick! It’s incredible to think what is possible with sharp, pro-tech, pro-business people in government,” Armstrong stated.

Key Takeaways:

• David Sacks pledges to investigate Operation Choke Point 2.0 after widespread criticism.

• Coinbase demands transparency from FDIC, escalating legal action over “pause letters.”

• Senate vote on SEC Commissioner Crenshaw could reshape crypto regulations under Trump’s administration.