 killing crypto. So this is an interesting story, but it kind of connected a lot of dots for me in terms of what I've been seeing over the last few months, really over the last two months, it's happened pretty quickly from the Biden administration and from elements within a Democratic party and then from regulators throughout the administration. And that is a real considerate effort, a real considerate attempt by this administration to try to kill off crypto and to do so in kind of subtle hidden ways without having to declare that that's what they're doing without announcing any change in policy really, without alienating maybe a lot of the people who hold crypto directly because there's been no change in policy. So this is kind of a stealth way to try to kill crypto. Let's call it and a lot of this I'm taking for Pirate Wires, which is a sub stack I subscribed to in an article new written by Nick Carter. And the, let's call this operation choke point 2.0. Now, for those who don't know what choke point 1.0 is, I think it's very, very, it's important that you know what it is. It's a maybe one of the low points in American government policy, right? In fascist implementation. So one of the great frustrating frustrations of government and I'd say Democrats in particular who would like to control business and basically like to drive out of business those businesses they don't like. I don't know, Democrats had their way, things like payday loans, things like gun manufacturers, things like private colleges, whatever, there's a whole string of businesses that our central planners and our morality police and the philosopher kings do not believe, contribute to social well-being and think that it is bad for you and therefore they would like to basically drive those businesses out of business. And of course, maybe in these days in the world in which we live today, they would really like to do is drive kind of all companies out of business. They would like to drive fracking companies out of business. They would like to drive a lot of companies out of business and but they can't. They can't because it's politically untenable. They can't because they don't have enough political power. They can't because Congress won't pass those bills. Even Democrats in Congress won't pass those bills. They just, it's impractical for them to actually shut down these businesses. That is the American people will flip out and go after them. I mean, they would like to shut down certain car companies that don't produce electric vehicles or shut down those parts but they also can't really shut down the car companies because the labor unions who are part of the car companies are supporting them. So it's complicated, right? The whole thing is complicated. But the certain industries we know they don't want. They don't want certain pipelines to be funded. They don't want certain businesses and you know, things like again, firearm manufacturers and private colleges. For example, there was a whole thing about private colleges. Anyway, during the Obama administration, they came up with an incredibly creative way of doing this. And in my view, one of the worst examples of government abuse of power in American history. But one of these things that never go reported and nobody ever does a big deal out of them and nobody really reports them. This was actually called choke point. An idea was that the Department of Justice would go and meet with banks. Nothing official, nothing formal, no new law, no particular regulations. But basically the Department of Justice would go and take a member of the FDIC, Federal Deposit Insurance Corporation or the OCC Office of the Controller Currency, both of which are bank regulators. And the Department of Justice would coordinate with the FDIC and OCC. And they would go to banks and they would basically encourage the banks to redline. Not based on race, not based on income, not based on risk. Well, they would argue that it was based on risk. They basically tell banks, we don't want you to lend to risky businesses. We don't want you to lend to businesses that might get into legal trouble with the government because if you lend to those businesses, and they get into trouble with the government, then those are gonna be bad loans in your books and we the regulators will have to come in and intervene. So what we'd rather you do is don't lend to them to begin with, just don't lend to them. And they did this primarily with the big banks, but they did a lot of regional banks. And basically they had a list of like a dozen industries that banks were requested not to lend any money to and not to have any banking relationship with. Firearm manufacturers, adult entertainment, and as I said, private colleges among them. And I remember I was on a board of a private college at the time and basically the college got a phone call one day from one of the primary banker and the banker said, look, we have to cut all ties with you guys. Why? Well, because the government has suggested it, has recommended it. And they did, they cut all ties with the private college, private college had to scramble and find a small bank somewhere in California to do business with that bank had not come into pressure from the government is willing to take the risk because they needed the revenue and they established a banking relationship, but the big bank had cut it off. And this was a mechanism to penalize those point. The idea is to choke point is to choke capital. This was in, this was started in, this is by the way how the, by the sorry, the Obama administration got rid of the online poker business. Online poker companies were basically, they squeezed their banking relationships and they killed the industry based in the US through their banking industry, through their banking relationship. They couldn't take Visa, Mastercard and so on. And now they were applying it to a mass of other industries. I don't know that they actually succeeded. I don't think, for example, the adult entertainment business. I don't think the adult entertainment business was, has been choked off. It seems to be thriving. It did some damage maybe to the marginal, at the margin, but, you know, gun manufacturers, private colleges, I don't think that is what hurt them. Other things the government did hurt private colleges, but not that. This is a way to choke off capital from these industries. Anyway, much of that was reversed under Trump, although it continued informally under Trump. You know, Bank of America and Citibank, a deep platformed firearm companies, Bank of America, you know, began reporting client firearm purchases. This is in 2018 under Trump. In 2019, AOC announced an intent to marginalize private pensions through her seat on the private house financial services committee. I don't think she did anything or could do anything, but that was the intent. Anyway, over the last few months, really since the early December, since FTX kind of completely blew up, there has been an effort by members of Congress, the Fed, the FDIC, the OCC, and the Department of Justice to choke off crypto, basically to make the relationship between crypto and banks impossible, and thus to make it very difficult for crypto to basically to convert your coins, your cryptocurrency into dollars, because for that, you need to go through a bank. So for example, December 6th, Elizabeth Warren, John Kennedy, and Roger Marshall sent a letter to crypto-friendly bank Silvergate, scolding them for providing services to FTX and Alameda Research, and lamblasting them for failing to report suspicious activities associated with these activities. On December 7th, signature, another active bank in the crypto space, announced its intent to have deposits ascribed to crypto clients. They were basically giving the crypto customers their money back and shutting down their accounts. Crypto deposits dropped from 23 billion to 10 billion. January 3rd, the Fed, the FDIC, and the OCC released a joint statement on the risks to banks engaging with crypto, not explicitly banning banks ability to hold crypto or deal with crypto clients, but strongly discouraging them from doing so on a, quote, safety and soundness basis. On January 9th, Metropolitan Commercial Bank, one of the few banks that serve the crypto clients, announced a total shutdown of its cross crypto asset-related vertical. On January 9th, Silvergate stock falls to a low of $11.25 on a bank run. There's a bank run because of the crypto exposure and its solvency fears. The bank dealt with the bank run. The bank actually handed over cash to anybody who redeemed their accounts. Again, the bank had traded as high as $160 a share and now is it under 12. On January 21, Binance announced, Binance is a big crypto exchange, announced that due to the policy at Signature Bank, they will only process user Fiat transaction with more than $100,000, couldn't do small transactions. January 27th, the Fed denied crypto bank custodias to your application two years to become a member of the Federal Reserve System, citing safety and soundness risks. Of course, everybody else who had an intention, all the other crypto banks who had an intention of getting a license from the Fed are now not applying. It's completely frozen that market. The Kansas City Fed branch denied custodias application for a master come, which would have given it an ability to use wholesale payment services and to hold reserves with the Fed directly. Then on January 27th also, the Fed issued a policy statement which discourages banks from holding crypto assets or issuing stable coins and broadens their authority to cover non-FDIC and show state-charted banks. It's just a broadening of the Fed's authority without legislation, without anything. And then, so they are now regulating state-charted banks like Astodia. And you can go on and on and on. And on February 8th, Protagio and Praxis applications to obtain full approval to become national trust banks still outstanding, 18 months, and they're probably gonna be denied by the OCC. And you can see on and on and on, a systematic approach by regulators to crush the crypto market. Now, as you know, I am not a huge crypto fan. And I'm certainly not a crypto as money is gonna replace the dollar fan. I don't think that's gonna happen. But I am a huge believer in letting the markets work. Letting the markets work, all this will do, by the way, is drive, it'll crush the crypto industry which is still looking for its killer app, which is sad because there's a lot of innovation going on in this industry and there's a lot of interesting things going on. And there's a lot of upside and potential going on. So a lot of venture capital just won't flow to this industry and it's gonna dry up. And in that sense, the regulators are gonna be successful. But at the margin, what it's going to do is gonna drive whatever is left and the investments in crypto overseas to other places where countries and places that want the business and want the capital and want the flow of money. This I mean, those other places are actually significantly less regulated and significantly less capital markets in the US. Much more opportunities for fraud and deception in those other markets. Remember, FTX was not in the United States because of excess regulations and excess controls and excess problems that they were having here. They were in the Bahamas and of course FTX landed up as a massive case of fraud. So this is gonna drive a lot of these businesses offshore into all kinds of places, all kind of places that don't have the best reputation for the rule of law. And it's a shame. Here's a burgeoning industry who knows what its upside potential is. Maybe it's very limited. Maybe there's nothing. Maybe there's no there there. But until we let without letting the industry play out, we will never know. And the government here, as I predicted they would from day one, is actually trying to suppress them. I think this is just the beginning. I think there's gonna be a lot more. Many in the crypto industry kind of saying, okay, we'll wait it out. And when DeSantis comes back in office, all this will be reversed and we're back in business. I think they're deluding themselves. It's not clear to me at all that the Republican administration will be more friendly to crypto, particularly towards the possibility of undermining the dollar. But I think there's real delusion in the crypto space in terms of what government is gonna let them get away with, but we will see. But it's sad that we're not being allowed to see it play out. Maybe crypto is all just one pyramid scheme. Let's have it play out and let's see what happens and let's see how it does. Thank you for listening or watching the Iran Book Show. If you'd like to support the show, we make it as easy as possible for you to trade with me. You get value from listening. You get value from watching. Show your appreciation. 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