The Departure of Michael Barr: A Potential Shift in the Federal Reserve’s Stance on Crypto
Michael Barr Resigns as Vice Chair for Supervision at the US Federal Reserve
As the crypto industry continues to navigate the complexities of regulatory frameworks, a significant development has emerged from the US Federal Reserve. Michael Barr, the vice chair for supervision, is set to resign from his position, effective February 28 or earlier, if a successor is appointed. This move marks the latest exit by an official linked to the purported federal effort to debank crypto companies, known as "Operation Chokepoint 2.0."
Barr’s Resignation and Its Implications
Barr’s resignation was announced in a letter addressed to President Joe Biden on January 6. In the letter, he indicated that his departure would enable him to continue serving as a member of the Federal Reserve Board of Governors. However, some members of the crypto community have expressed concerns about Barr’s role and its impact on the industry.
Operation Chokepoint 2.0: A Campaign Against Crypto Companies?
The term "Operation Chokepoint 2.0" refers to the alleged federal effort to debank crypto companies. While US officials haven’t confirmed the existence of such an operation, a recent court order allowed Coinbase to obtain unredacted files from the FDIC to investigate its role in this purported campaign.
Crypto Industry Executives React to Barr’s Resignation
Some crypto industry executives have viewed Barr as a key reason why many US banks have been hesitant to offer services to crypto firms. In particular, his March 9, 2023 speech, in which he seemingly confirmed the central bank’s outlook on crypto assets, has been criticized by some.
Senator Cynthia Lummis: ‘A Failure of Leadership’
In a January 6 post on X (formerly Twitter), Senator Cynthia Lummis condemned Barr’s performance as vice chair for supervision. She stated that Barr had "completely failed to fulfill his duties" and had enabled Operation Chokepoint 2.0.
Caitlin Long: ‘The Fed’s Debanker-in-Chief’
Caitlin Long, CEO of Custodia Bank, referred to Barr as "THE FED’S DEBANKER-IN-CHIEF." She argued that he was one of the architects of Operation Chokepoint 2.0 and had used his position to harm Wyoming’s digital asset industry.
Nic Carter: A Positive Development for the Crypto Community
The departure of Michael Barr has been viewed positively by Nic Carter, a partner at Castle Island Ventures. He observed that over half of those responsible for Operation Chokepoint 2.0 have announced their resignations or stepped down in recent months.
The Remaining Targets of Operation Chokepoint 2.0
Nic Carter’s list of targets includes Massachusetts Senator Elizabeth Warren, Federal Reserve board member Michael Gibson, and Nellie Lang, Under Secretary of the Treasury for Domestic Finance. These individuals are still considered to be part of the alleged federal effort to debank crypto companies.
Stablecoin Regulation: A Necessary Step Forward?
While some have criticized Barr’s stance on crypto assets, he has also pushed for responsible stablecoin regulation. This is an area where most industry pundits agree that progress is necessary to advance crypto adoption in the US.
The Investigation into Operation Chokepoint 2.0
Coinbase’s chief legal officer, Paul Grewal, has explained that the company obtained unredacted files from the FDIC as part of its investigation into Operation Chokepoint 2.0. These files allegedly reveal a coordinated effort to stop various crypto activities.
John Deaton: A Call for Investigation and Accountability
Former US prosecutor John Deaton has offered to lead an investigation into Operation Chokepoint 2.0 on behalf of the incoming Trump administration. He emphasized that if these actions go unchallenged, it creates a dangerous precedent where regulatory bodies can quietly suppress entire industries they disfavor.
Conclusion: A New Era for the Federal Reserve and Crypto Regulation?
Michael Barr’s resignation marks an important development in the ongoing saga of Operation Chokepoint 2.0. As the crypto industry continues to navigate the complexities of regulatory frameworks, it remains to be seen how this change will impact the future of crypto adoption in the US.
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