Concerns Raised Over Harris Campaign’s Crypto Strategy Following Fed Actions

Critics assert that the Federal Reserve’s recent moves signal an overreach that may impede progress in the dynamic cryptocurrency landscape.

Impact of Federal Reserve’s Enforcement Actions

The Federal Reserve’s enforcement actions against the crypto-friendly Customers Bank have sparked discussions regarding the Harris campaign’s proposed adjustments in the cryptocurrency domain. Notable industry figures have expressed apprehensions about this situation.

On August 9, Tyler Winklevoss, co-founder of Gemini, took to social media to underscore the Fed’s measures, stating, “Today, the Fed confirmed that Operation Choke Point 2.0 remains in full effect, providing clear insights into its operation and validating that the Harris crypto ‘reset’ is a scam.”

Crackdown on Crypto Banking

The Fed’s detailed enforcement action against Customers Bank mandates the institution to offer a 30-day notice prior to initiating any new banking relationship with a cryptocurrency entity.

Winklevoss articulated that this enforcement could have far-reaching consequences, as Customers Bank stands as one of the few remaining crypto-friendly banks in the United States. He highlighted how the Federal Reserve is effectively controlling banking access for crypto businesses, thus determining who is eligible to have a bank account, which severely restricts operational capabilities.

He criticized the consolidation of decision-making authority within the Federal Reserve, advocating that such determinations should be decentralized and made with discretion by individual banks.

Responses from Industry Leaders

Charles Hoskinson, founder of Cardano, joined Winklevoss in voicing concerns, claiming that the current administration’s approach is detrimental to the cryptocurrency sector.

Hoskinson warned that voting for Kamala Harris could negatively impact the American crypto industry, suggesting that her administration would persist in actions perceived as a “war on crypto.”

Additionally, in a letter addressed to the Chair of the Democratic National Committee, Jaime Harrison, a coalition of House lawmakers urged the party to adopt a more favorable position on digital assets and blockchain technology.

Between March and August 2023, the U.S. banking sector experienced significant turbulence, resulting in the failure of numerous banks that serviced crypto enterprises, including Silvergate, Signature, and Silicon Valley Bank. In contrast, Customers Bank continued its operations, providing services to its crypto clients while imposing a limit of 15% on CBIT deposits in relation to total deposits.