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Nic Carter Claims Biden Administration Forced Silvergate Bank into Bankruptcy to ‘Decapitate’ Crypto Industry

Nic Carter

Nic Carter Claims Biden Administration Forced Silvergate Bank into Bankruptcy to ‘Decapitate’ Crypto Industry

Nic Carter, a prominent figure in the blockchain space and a partner at Castle Island Ventures, has made bold accusations against the Biden administration regarding the forced bankruptcy of Silvergate Bank. In a recent article for Pirate Wires, Carter argued that the bank’s voluntary liquidation was coerced as part of a broader effort to crack down on the crypto industry. His claims, which were reported by Cointelegraph, have reignited concerns about the U.S. government’s alleged role in increasing regulatory and financial pressure on the cryptocurrency sector.

Carter asserts that the Biden administration pressured Silvergate Bank into limiting its crypto deposits to a maximum of 15% or face sanctions. He also underscored the rarity of a bank voluntarily liquidating, implying that Silvergate should have been given more time to turn its business around. According to Carter, this is further evidence of a deliberate government effort—referred to as “Operation Choke Point 2.0”—to suppress the growth and influence of the crypto industry.

The Collapse of Silvergate Bank

Silvergate Bank, once a leading financial institution known for its ties to cryptocurrency businesses, shocked the financial world when it announced its voluntary liquidation earlier in 2023. The bank had become a significant player in the crypto space, facilitating crypto-related deposits and offering services to many of the top names in the blockchain industry.

However, as regulatory scrutiny of the crypto industry ramped up, Silvergate found itself in a precarious position. Facing increasing pressure from regulators and a loss of confidence following the collapse of FTX, one of its major clients, Silvergate ultimately decided to wind down its operations.

In his article, Nic Carter argues that Silvergate’s downfall was not solely due to internal issues or market conditions, but rather the result of direct pressure from the U.S. government. He claims that the Biden administration’s demands for Silvergate to limit its exposure to crypto deposits to just 15% of its total holdings created an impossible situation for the bank, forcing it into an unsustainable business model.

Operation Choke Point 2.0: A Coordinated Attack on Crypto?

Carter’s accusations form part of a broader narrative that has been circulating within the crypto community for months. Known as “Operation Choke Point 2.0,” this alleged government initiative refers to a systematic effort by U.S. regulators and financial authorities to choke off access to banking services and financial resources for crypto businesses. The term harkens back to the original Operation Choke Point, which was a program launched in the early 2010s aimed at cutting off banking access to businesses that were deemed risky or undesirable by the government, such as payday lenders and firearms dealers.

According to Carter, the bankruptcy of Silvergate Bank is a clear demonstration that Operation Choke Point 2.0 is a real and ongoing effort to suppress the crypto industry. He argues that the U.S. government, under the Biden administration, is using regulatory and financial pressures to “decapitate” the crypto space, targeting key players like Silvergate in an attempt to weaken the industry as a whole.

Carter believes that Silvergate had the potential to recover from its challenges and should have been given more time to do so. Instead, the administration’s intervention, in his view, led to the premature collapse of a bank that was deeply embedded in the crypto ecosystem.

The Broader Implications for the Crypto Industry

Carter’s claims have sent ripples through the crypto community, as they raise concerns about the future of cryptocurrency and blockchain innovation in the United States. If the government is indeed taking steps to stifle the industry, as Carter suggests, it could have significant implications for the regulatory environment, investor confidence, and the growth of digital assets.

The collapse of Silvergate Bank comes at a time when the crypto industry is already facing increased regulatory scrutiny and market volatility. The failure of major platforms like FTX and the collapse of Terra have led regulators to take a harder stance on the crypto space, with calls for tighter oversight and new regulations.

Critics of the Biden administration’s approach argue that overly aggressive regulation could stifle innovation and push crypto companies to move their operations overseas, where regulatory frameworks may be more accommodating. Others, however, see the increased scrutiny as a necessary step to protect consumers and ensure the long-term viability of digital assets.

Conclusion: A Deliberate Suppression or Necessary Regulation?

Nic Carter’s claims that the Biden administration forced Silvergate Bank into bankruptcy as part of a broader effort to decapitate the crypto industry have sparked debate within the crypto space. While some view the bank’s collapse as a direct consequence of regulatory overreach, others see it as part of a necessary response to the challenges and risks posed by the volatile and largely unregulated cryptocurrency market.

As the debate over Operation Choke Point 2.0 continues, the future of cryptocurrency regulation in the U.S. remains uncertain. What is clear, however, is that the relationship between crypto businesses and traditional financial institutions is under increasing strain, with the fate of companies like Silvergate serving as a cautionary tale for the industry.

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For more insights, explore our article on U.S. government actions, where we discuss the latest developments in crypto policy and their impact on the market.

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