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Crypto Hedge Funds Face Banking Challenges
A new survey has highlighted a concerning trend in the cryptocurrency sector: crypto hedge funds are struggling to access basic banking services. According to the report by the Alternative Investment Management Association (AIMA), three-quarters of the 160 surveyed crypto hedge funds have reported significant banking challenges over the past three years, in stark contrast to none of the 20 traditional hedge funds surveyed that experienced similar issues.
This phenomenon raises serious questions about potential targeting of the cryptocurrency sector, sparking outrage and demands for clarity within the industry. The term “Operation Chokepoint 2.0” has gained traction as crypto hedge funds and related businesses face growing barriers to financial services. This echoes parallels to the original “Operation Choke Point,” a regulatory program initiated in 2013 by the U.S. Department of Justice, which aimed to limit banking access for industries deemed “high risk.”
Industry leaders are calling for transparency, with Coinbase’s Chief Legal Officer Paul Grewal stating on X, formerly Twitter, that “Why would three-quarters of crypto hedge funds report issues with basic banking services over three years when zero were reported by other hedge funds? We need answers, now.” Coinbase has taken an active role in challenging these regulatory practices, advocating for fair treatment and transparency.
As the regulatory landscape continues to shift, the upcoming U.S. presidential election could play a pivotal role in determining the future of Operation Chokepoint 2.0. Pro-crypto voices, including Donald Trump, have vowed to end the practice if elected. During his keynote at the Bitcoin Conference in July, Trump declared, “I will immediately shut down Operation Chokepoint 2.0. They want to choke you out of business, and we’re not going to let that happen.”
The survey findings underscore the urgent need for dialogue between the crypto industry, regulators, and policymakers. Without access to reliable banking services, crypto hedge funds may face operational difficulties that hinder growth and innovation.
Source: cryptocurrencynews.com
