Hedge Funds and Banking Services: The Ongoing Struggle
The Challenges Faced by Crypto Hedge Funds
A recent survey by the Alternative Investment Management Association (AIMA) revealed that around 120 hedge funds engaged in crypto reported difficulties in accessing banking services over the past three years. This number represents roughly 75% of the 160 hedge funds surveyed. The survey highlights the banking issues that these funds face, ranging from unclear communication to outright termination of relationships.
The Banking Issues
The survey revealed that among the crypto hedge funds that encountered issues, a little over half were explicitly informed by banks that their relationships would be terminated. However, the reasons for these decisions were often vague or non-existent. When banks did provide explanations, they cited a desire to limit exposure to crypto clients or the industry.
Operation Chokepoint 2.0: The Alleged Effort to Subdue the Crypto Industry
The crypto industry has been discussing the existence of an effort by the Joe Biden administration called "Operation Chokepoint 2.0," which allegedly aims to subdue the crypto industry in the US by limiting access to banking services. Coinbase chief legal officer Paul Grewal recently released letters from the Federal Deposit Insurance Corporation (FDIC) to banks throughout 2022, where the financial authority urges the institutions to pause or completely stop crypto-related activities.
The Proof
The documents were obtained through a Freedom of Information Act (FOIA) request filed on October 18, which sought clarification on an alleged 15% deposit cap imposed on crypto-friendly banks. Grewal stated that the letters were proof that Operation Chokepoint 2.0 exists.
Custodia Bank and WSPN CEO Confirm the Allegations
Custodia Bank CEO Caitlin Long echoed the sentiment, saying the letters were proof of a coordinated effort to hinder the crypto industry in the US. Austin Campbell, CEO of global digital payments company WSPN, shared that the AIMA survey further proves that Operation Chokepoint 2.0 is real.
Conclusion
The survey by the Alternative Investment Management Association (AIMA) highlights the ongoing challenges faced by crypto hedge funds in accessing banking services. The banking issues reported by these funds range from unclear communication to outright termination of relationships. The alleged existence of Operation Chokepoint 2.0, an effort to subdue the crypto industry, is further solidified by the release of letters from the Federal Deposit Insurance Corporation (FDIC) and confirmation from industry leaders.
FAQs
Q: What is Operation Chokepoint 2.0?
A: Operation Chokepoint 2.0 is an alleged effort by the Joe Biden administration to subdue the crypto industry in the US by limiting access to banking services.
Q: What is the goal of Operation Chokepoint 2.0?
A: The goal of Operation Chokepoint 2.0 is to limit the growth and development of the crypto industry in the US by restricting access to banking services.
Q: Who is affected by Operation Chokepoint 2.0?
A: Crypto hedge funds and other entities involved in the crypto industry are affected by Operation Chokepoint 2.0, as they face difficulties in accessing banking services and may be forced to find alternative solutions.
Q: What is the impact of Operation Chokepoint 2.0 on the crypto industry?
A: The alleged existence of Operation Chokepoint 2.0 could have a significant impact on the crypto industry, potentially limiting its growth and development, and making it more challenging for entities involved in the industry to operate.
