Author｜jk, Odaily Planet Daily
With the Trump administration taking office, the top regulators who once dominated the US anti-crypto policy are now facing a comprehensive liquidation. Major financial regulators such as the US Securities and Exchange Commission (SEC), the Federal Deposit Insurance Corporation (FDIC), and the Commodity Futures Trading Commission (CFTC) are undergoing large-scale personnel adjustments and policy shifts. It can be seen that Washington's regulatory attitude is undergoing fundamental changes. Next, Odaily Planet Daily will show you what these changes and liquidations have brought to the industry.
SEC: Gary Gensler's team has all left, pro-crypto people have moved in, and the enforcement process has changed
SEC, the new official takes office with three major actions
The atmosphere at the SEC headquarters at 100 F Street in Washington, DC is changing. With Trump taking office, Gary Gensler resigned on the same day, and the crypto-friendly Mark Uyeda became acting chairman, temporarily taking over the duties of chairman before the nomination of the new chairman Paul Atkins. This building with a beautiful glass curtain wall is no longer the public enemy of the crypto industry, but has become a truly friendly regulator.
On February 5, local time in the United States, two people familiar with the matter revealed that the U.S. SEC now requires its lawyers to obtain high-level approval before officially launching an investigation. The new requirements stipulate that law enforcement officers must obtain permission from politically appointed commissioners to issue subpoenas, request documents, and compel testimony. There are currently three commissioners: Acting Chairman Mark Uyeda, Hester Peirce (Crypto Mom), and Caroline Crenshaw (Democratic Commissioner). During the previous administration, the SEC only needed to obtain approval from two law enforcement directors to formally launch an investigation, and law enforcement officers could continue informal investigations without the approval of the commissioners, including sending information requests.
At the same time, I believe many readers have already known that SEC Acting Chairman Mark Uyeda has established a new cryptocurrency working group, led by crypto-friendly commissioner Hester Pierce, known as "Crypto Mom", with the ultimate goal of providing regulatory clarity and proposing a clear cryptocurrency regulatory framework (similar to the EU's MiCA). The follow-up to this news is that Acting Chairman Mark Uyeda appointed Landon Zinda, the policy director of the former cryptocurrency advocacy organization Coin Center, to join the committee as his legal counsel and senior advisor to the cryptocurrency working group.
On the website of the SEC’s cryptocurrency working group, the SEC’s supportive attitude is very clear, and it even provides an email address for crypto professionals to contact the SEC directly. Source: SEC official website
Hester Peirce said: “The Cryptocurrency Working Group is considering recommending that the SEC take action to provide temporary prospective and retroactive relief for token issuances (compared to previous retroactive enforcement by the SEC), in which the issuing entity or other entity willing to assume responsibility provides certain specific information and keeps it updated, and agrees not to challenge the SEC’s jurisdiction in cases alleging fraud related to the purchase and sale of assets.”
Is the reckoning coming? Anti-crypto activists are marginalized
Odaily previously reported that almost all of the senior legal officials who worked under Gary Gensler, including those in the enforcement division and the general counsel's office, have resigned, and it can be inferred that his entire team has left. Previously, the SEC's chief economist Jessica Wachter, chief accountant Paul Munter and general counsel Megan Barbero have also resigned.
What about those who don’t leave?
The SEC has reportedly reassigned former crypto asset and cyber unit deputy director and crypto litigation attorney Jorge Tenreiro to its Computer Systems Management (IT) Division. Tenreiro has worked at the SEC for more than 11 years, starting as an enforcement attorney before serving as head of the agency’s cryptocurrency enforcement unit from October 2022 to November 2024, according to his LinkedIn information.
Tenreiro has been involved in several SEC enforcement cases against cryptocurrency companies, including those against Ripple and Coinbase. The SEC has downsized its crypto enforcement division as a result of a U-turn since President Trump took office.
FDIC: Regulatory hostility has completely disappeared, and crypto banking services may return
What is the FDIC?
The FDIC (Federal Deposit Insurance Corporation) is an independent agency in the United States that is responsible for insuring bank deposits and protecting depositors against up to $250,000 in compensation in the event of a bank failure. The FDIC regularly reviews the balance sheet of banks, assesses risks, prevents improper business practices, and takes corrective measures when problems are discovered, and can even close banks that are seriously violating regulations or insolvent. In addition, the FDIC is responsible for takeover and liquidation when a bank goes bankrupt, protecting the interests of depositors and maintaining the security and stability of the financial system. If a bank fails, the FDIC will usually arrange for another bank to take over the deposits, or directly compensate depositors, making the banking system safer and more reliable.
Simply put, the FDIC is the national bank insurance in the United States, which guarantees the safety of consumers' deposits in banks. Previously, when Silicon Valley Bank went bankrupt, it was the FDIC that was responsible for the aftermath and subsequent arrangements.
Why is national bank insurance relevant to the crypto industry?
Because of the FDIC’s regulatory functions, the FDIC was actually not a good name for the crypto industry before; the FDIC restricted the crypto industry’s access to banks and attracted complaints from the entire crypto industry.
Imagine if you opened a crypto company or project, you could not open an account at any major US bank, nor could you get a loan, and you could not enjoy any banking services that a commercial project should enjoy. This is Operation Choke Point 2.0, a policy that prohibits crypto projects from enjoying banking services, and the FDIC is the main regulator of this policy. We will talk about this policy below.
This is not groundless. Anchorage Digital CEO Nathan McCauley said at the U.S. Senate's "de-banking" hearing that although Anchorage Digital is a federally licensed crypto bank, it was still refused service by banks, resulting in business losses and even 20% layoffs. McCauley pointed out that between 2021 and 2023, U.S. regulators gradually pressured banks to stay away from the crypto industry, including a number of policies jointly issued by the OCC, FDIC, SEC, and the Federal Reserve, which made banks generally unwilling to cooperate with crypto companies, resulting in many crypto companies being unable to obtain basic banking services, and some were even forced to close.
Consensys CEO Joseph Lubin said that the company had been twice cut off from the financial system by US authorities and was a victim of Operation Chokepoint 2.0. In the latest incident, a large US bank (reportedly Wells Fargo) finally closed the Consensys account after pressure from regulators. Lubin revealed that the bank initially tried to delay execution and expressed support for Consensys, but ultimately could not withstand the pressure. In addition, Lubin himself was also targeted in this liquidation operation.
How is the FDIC different today?
With Trump taking office, the FDIC has also changed.
The Federal Deposit Insurance Corporation (FDIC) recently announced that it is actively re-evaluating its regulatory approach to cryptocurrency-related activities, including withdrawing and replacing Financial Institution Letter (FIL) 16-2022, which provides a compliance path for banking institutions to participate in cryptocurrency and blockchain-related activities while complying with the principles of safety and soundness. The FDIC plans to work with the Digital Asset Market Working Group established by Trump's executive order to optimize the regulatory framework.
FDIC Acting Chairman Travis Hill has criticized the FDIC’s stance for discouraging banks from exploring blockchain and digital assets, stating: “I have been critical of the FDIC’s approach to crypto assets and blockchain in the past. As I stated last March, the FDIC’s approach ‘has led to a widespread belief that if an institution is interested in anything related to blockchain or distributed ledger technology, the institution cannot conduct business.’” After assuming the position, Hill initiated a review of all regulatory communications related to crypto banks, stating: “After becoming Acting Chairman, I directed staff to conduct a comprehensive review of all regulatory communications with banks attempting to offer crypto-related products or services.”
To increase transparency, the FDIC recently released 175 documents detailing its supervision of banks' crypto-related businesses. These changes mean that banks can custody customers' cryptocurrencies and they will be insured by the FDIC.
Operation Choke Point 2.0: It is about to end, and participants may be held accountable and liquidated
How powerful is Operation Choke Point 2.0?
We have just mentioned that Operation Choke Point 2.0 is a policy that prohibits crypto projects from enjoying banking services. In fact, the scale of this action may be far beyond the imagination of readers.
Blockworks described it this way: If FTX is a butterfly flapping its wings in the Amazon rainforest, then "Operation Choke Point 2.0" is the torrential rain that is now pouring down on the US cryptocurrency industry.
The action is a joint effort by the Biden White House, the Federal Reserve, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Department of Justice (DOJ), plus “influential people in Congress,” to deprive the cryptocurrency industry of fiat currency access in order to completely kill the industry.
Senators Roger Marshall, Elizabeth Warren, and John Kennedy put pressure on Silvergate, and Signature Bank subsequently drastically cut cryptocurrency-related deposits in December 2023. In January 2024, the FDIC, OCC, and Federal Reserve jointly stated that banks were "strongly discouraged" from supporting crypto businesses, and Metropolitan Commercial Bank completely closed its cryptocurrency business.
At the same time, crypto companies trying to control their own fiat channels have also encountered resistance. The Federal Reserve formally rejected Custodia's (formerly Avanti) application to join the Federal Reserve system at the end of January, which had been delayed for more than two years. Although Anchorage became the first national trust bank to receive conditional approval in 2021, Paxos and Protego have not yet been approved. The government's classification of cryptocurrency banks as "high risk" will have four major negative effects, including FDIC raising insurance premiums, Federal Reserve lowering capital ratios (limiting overdraft capabilities), restricted business activities, and lower regulatory review scores (affecting merger and acquisition capabilities), further exacerbating the isolation of banks from the crypto industry.
Moreover, most of the above actions are invisible. That is, not only can cryptocurrency companies not sue, but they may not even find evidence. Many people who are pushing this are hiding behind the screen and exerting pressure secretly.
All this began to change when Trump took office.
What is the attitude of US regulators today?
The U.S. Congress first held a hearing on Operation Choke Point 2.0, inviting people in the crypto industry to describe how they were "choked". U.S. Congressman Meuser said at the hearing that the Biden administration's Operation Choke Point 2.0 was implemented by regulators and specifically targeted and de-banked the digital asset ecosystem.
“The FDIC has pressured banks, both through private conversations and formal regulatory threats, to deny service to digital asset companies, their employees, and even their customers.
This is a serious abuse of power that not only stifles innovation, but also directly harms consumers by depriving them of access to new and potentially beneficial financial products…
Just yesterday, FDIC Acting Chairman Travis Hill publicly exposed the Biden administration’s Operation Choke Point activities, which led to the debanking of cryptocurrency businesses across the country… The FDIC has pledged to correct this problem in the future, and I will continue to monitor its rectification progress and explore legislative solutions to ensure that this does not happen again.
“Free markets can only thrive if innovation is allowed to flourish. It is the job of regulators to protect our financial system — but this should not come at the expense of legitimate businesses, like energy companies and cryptocurrency firms.”
The official hearing of the US Congress acknowledged the existence of Operation Choke Point 2.0. Source: YouTube
Readers can carefully appreciate the difference in today's official characterizations.
Meanwhile, U.S. federal judge Ana C. Reyes harshly criticized the Federal Deposit Insurance Corporation (FDIC) in Coinbase’s case against the FDIC. The lawsuit stems from Coinbase’s attempt to obtain documents from the FDIC that sent a “suspension letter” to banks to restrict cryptocurrency-related activities, which was evidence of Operation Choke Point 2.0. Judge Reyes noted that the FDIC failed to provide a large number of documents related to the Freedom of Information Act (FOIA) request previously submitted by Coinbase and may have destroyed some of the case information.
Ana C. Reyes directly questioned the FDIC at the hearing: "Can you explain why you interpret the FOIA request in such a narrow way? Its content is clear and not as restricted as you understand it." Excerpts of some of the conversation are as follows:
Andrew Dober (FDIC attorney): Yes, Your Honor, I can --
The Court: No, just answer my question directly.
Andrew Dober: I do have a statement on these issues, Your Honor. The FDIC is asking the court to stay this case for three weeks—
The Court: No, you can't. I want you to answer my question now.
Andrew Dober: Because of the leadership change --
The Court: I want you to answer my question now.
Andrew Dober: Yes, Your Honor. Could you please repeat those questions?
The Court: Who took such a narrow and illogical interpretation of FOIA requests?
Andrew Dober: Your Honor, I think that was the way it was understood at the time --
The Court: I didn’t ask you how you interpreted it, but who did it. This is an almost ridiculously narrow interpretation. Who?
According to The Block, Scott Johnsson, a partner at VBCapital, said: "It is shocking to see a federal judge berate a federal agency's lawyers in such a harsh manner."
Judge Reyes not only plans to subpoena FDIC employees to testify in mid-February, but also warns that if the FDIC does not cooperate, "life will become very, very unpleasant for the FDIC." She further questioned whether the FDIC has taken the document retention measures required by law and pointed out that Andrew Dober may face "serious sanctions."
And the reckoning is coming. U.S. Senator Cynthia Lummis said that today the U.S. Senate Banking Committee found the first solid evidence of Operation Chokepoint 2.0. She said, "Rest assured, the Digital Assets Subcommittee will find the relevant parties and hold them accountable."
CFTC: Reorganizing the Enforcement Division
On February 5, 2025, Caroline Pham, Acting Chair of the U.S. Commodity Futures Trading Commission (CFTC), announced that the agency has reorganized its enforcement division to focus more on combating fraud and stop replacing regulatory functions with enforcement actions. The reform aims to optimize resource allocation, improve law enforcement efficiency, and ensure market integrity.
Under the leadership of former Chairman Rostin Behnam, the CFTC Enforcement Division established several working groups responsible for the supervision of insider trading, cybersecurity and emerging technologies, and environmental fraud. After this reorganization, the CFTC has reduced the number of working groups in the Enforcement Division from multiple to two, namely the Complex Fraud Working Group and the Retail Fraud and General Enforcement Working Group.
The Complex Fraud Task Force will be responsible for handling complex fraud and market manipulation cases involving all asset classes, covering the entire process from investigation to litigation, while the Retail Fraud and General Enforcement Task Force will focus on combating retail market fraud and other general law enforcement matters.
Acting Chairman Pham pointed out in a statement that this adjustment is aimed at stopping "Regulation by Enforcement" and improving the efficiency of institutional operations, so that the CFTC can more accurately combat market fraud and misconduct rather than excessively impose compliance burdens. The CFTC announcement further emphasized that the new structure will more effectively prevent fraud, manipulation and market abuse, ensure market fairness, strengthen supervision and governance of law enforcement actions, prevent regulatory overreach, and improve the consistency of law enforcement and compliance with due process standards.
Why is this statement important? First of all, it is important to know that the CFTC has been involved in cases such as Binance and Coinbase, and is one of the more active US crypto regulators. Because of the commodity attributes of cryptocurrencies (such as gas fees), the CFTC believes that the crypto industry may be placed under its supervision. At the same time, law enforcement supervision is a common strategy of the SEC in the past, that is, "you can do whatever you want, but once something goes wrong, you will be fined." A strategy that allows you to do anything that is not prohibited by law.
However, this strategy often does not provide any regulatory clarity: a typical example is Coinbase. When Coinbase first IPOed, the SEC quickly approved it and did not provide any definition of the attributes of cryptocurrency. However, a few years later, Coinbase was sued on the grounds that cryptocurrency is an unregistered security and Coinbase provides a trading platform for unregistered securities. This capricious regulatory attitude has brought great uncertainty to the US crypto industry, which is why the CFTC’s clear statement that it prohibits law enforcement supervision is a huge benefit to the crypto industry.
David Sacks: What the New Crypto Czar Does
David Sacks, the White House's head of cryptocurrency and AI affairs, emphasized at a recent press conference the push for the United States to become a leader in the digital asset field and called for a clear regulatory framework to be established as soon as possible. He announced that the Senate and the House of Representatives will work together to develop cryptocurrency legislation to address the uncertainty that has long faced the industry. Senator Bill Hagerty proposed the GENIUS Stablecoin Act, hoping to provide legal support for this market by regulating the stablecoin issuance process. Sacks believes that stablecoins can not only consolidate the dollar's dominance in the international market, but may also bring trillions of dollars in demand for U.S. Treasury bonds, thereby lowering long-term interest rates and enhancing the stability of the U.S. financial system.
At the press conference, Senator Tim Scott, Chairman of the Senate Banking Committee, proposed that the goal is to pass the Stablecoin and Digital Assets Act through Congress within 100 days and send it to the President for signature. Representative French Hill, Chairman of the House Financial Services Committee, said that the new version of the Digital Assets Act will be amended on the basis of the FIT 21 Act to make up for previous loopholes, such as the practical feasibility of the SEC to classify tokens within 60 days. The Senate also plans to coordinate FIT 21 to ensure that the bill version can eventually be signed by the President and become law.
According to CNBC reports and interviews, Sacks also emphasized the negative impact of debanking on the crypto industry. He pointed out that keeping cryptocurrency-related businesses in the United States would be more conducive to consumer protection because regulators can more effectively monitor market activities when these businesses are located in the United States. He believes that the regulatory loopholes in the Bahamas led to the world's largest crypto fraud case (referring to FTX), and the United States should avoid repeating the same mistakes.
David Sacks (far right) stands with senators and congressmen at his first press conference. Source: Bloomberg
Sacks confirmed that Bitcoin Reserve will be included in the research agenda of the White House Digital Asset Task Force and may include seized assets. However, he said that the concept of a sovereign wealth fund is different from Bitcoin Reserve, and the specific policy will be the responsibility of incoming Treasury Secretary Howard Lutnick. The Trump administration is exploring the potential role of Bitcoin in the national fiscal system, but the specific plan is still under discussion.
David Sacks expressed the attitude of US regulation in one sentence: "The crypto war is over. I look forward to working with you to create a golden age of digital assets."
