Cryptocurrency firms are struggling to find new banking partners following the closure of three of the largest crypto-friendly banks in the U.S. Stakeholders and market watchers tell Forkast that this may be the result of a coordinated regulatory effort to unbank the industry.

The theory, or “Operation Choke Point 2.0,” a term coined by Nic Carter, a general partner at Castle Island Ventures, suggests that regulatory actions against Silvergate Bank, Silicon Valley Bank (SVB) and Signature Bank are part of a wider strategy to unbank the crypto industry. Washington-based law firm Cooper & Kirk supported Carter’s claims in a recent white paper. The law firm litigated the U.S. Justice Department’s original Operation Choke Point initiative that started in 2013 as a coordinated effort to weaponize the banking industry against unfavorable industries such as gun stores, payday lenders and tobacco stores. 

Adrienne Harris, superintendent of the New York Department of Financial Services, has dismissed the theory as “ludicrous,” but some industry participants are concerned about the impact of the regulatory crackdown on crypto.

Harris’ remarks came nearly a month after Signature Bank, the largest surviving crypto-focused bank in the U.S., was shut by regulators over what they called a “systemic bank failure,” a few days after the collapse of SVB and Silvergate.

(by Zoltan Vardai)