‘Don’t Even Think About It’: How Regulators Subtly Squeeze the Crypto Market

Ripple's chief legal officer, Stuart Alderoty, has highlighted what he sees as a calculated effort by U.S. regulators to stifle the cryptocurrency industry.

A top legal executive at Ripple has accused U.S. regulators of engaging in a subtle campaign to deter banks from serving the cryptocurrency industry.

In a series of posts on the social media platform X on Saturday, Ripple’s chief legal officer, Stuart Alderoty, highlighted what he sees as a coordinated effort by agencies like the Federal Deposit Insurance Corporation (FDIC), Federal Reserve, and Office of the Comptroller of the Currency (OCC) to restrict banking services for crypto-related businesses.

Alderoty pointed to the January 2021 rescission of the Fair Access to Banking Rule, which had aimed to ensure equal financial access, under the Biden administration. Later that year, the OCC mandated pre-approval for banks engaging in cryptocurrency activities through Interpretive Letter 1179, followed by the FDIC’s own directives in April 2022.

The Federal Reserve, FDIC, and OCC then issued warnings about “crypto risks” in January 2023, with further advisories following in February. These notices claimed that banks were not explicitly barred from serving crypto clients, but Alderoty saw a deeper intent.

“These warnings include the boilerplate: ‘Banks are not discouraged from serving crypto customers,'” he wrote. “As a former bank GC, I can decode that: ‘Don’t even think about it.'”

Having previously served as General Counsel at CIT Group and HSBC North America Holdings, Alderoty stressed that such language is a veiled deterrent.

“We're seeing the regulators engage in ‘Operation Chokepoint 2.0,'” he added. “In 2012, regulators (FDIC, OCC, Fed) weaponized banks against disfavored industries (gun stores, payday lenders, etc.) under the original ‘Operation Chokepoint.’ Fast forward to 2021: crypto is the new target.”

The Ripple legal chief’s comments come amid broader concerns from the tech and crypto industries over being “debanked” by financial institutions.

Industry leaders like Marc Andreessen, co-founder of Andreessen Horowitz, have reported that over 30 tech and crypto founders have been “debanked” in the past four years, driving some to leave the country or change industries.

“Operation Chokepoint 2.0 is a coordinated conspiracy by government officials to persecute their political opponents by debanking them,” Gemini co-founder Tyler Winklevoss wrote on X Saturday. “This is a federal crime that is ongoing and should be prosecuted.”