Thread by @nic__carter

So the whole tech world is learning about OCP2.0 today via pmarca on Rogan. What happened exactly? For those curious, let's dig into OCP as it pertained to crypto. Quick thread

https://twitter.com/elonmusk/status/1861667220876824869

In 2023, I noticed post FTX crypto firms were getting debanked - just like a16z, many of our portcos. I wrote this piece in Piratewires, coining OCP2.0 and summarizing what I was seeing

piratewires.com/p/crypto-choke…

Six weeks later, crypto banks Silvergate and Signature had collapsed under mysterious circumstances. Many saw this as just desserts for banks serving crypto. I felt differently, that they were "suicided" as part of OCP2.0

piratewires.com/p/2023-banking…

In this second post, I also discovered the exact mechanism of OCP2.0, which had not been reported anywhere else, because it was considered "confidential supervisory information" – the FDIC verbally messaged a secret 15% cap on crypto-related deposits to banks.

Over a year later, and choke point 2.0 was still in place. I took another look at Silvergate, post bankruptcy filing, and was increasingly convinced they were murdered by government edict.

piratewires.com/p/inside-biden…

Here's the X version of that article.

https://x.com/nic__carter/status/1840809389638500693

Here's a condensed version of that article in Coindesk if you don't feel like reading 8000 words.

coindesk.com/opinion/2024/1…

I was in Congress last week and raised the topic of OCP2.0 with several members. The good news is that Trump's FDIC and OCC appointees will end it day 1, Trump himself has vowed to end OCP2.0 as he said in a speech. But that's not enough...

First of all, we need a full and complete investigation into how a purportedly sleepy and nonpartisan bank regulatory body like the FDIC was deputized into a political death squad. We need to learn the role of the Fed, the OCC, the DoJ, the NEC, the names of those responsible

Second, we need legislation to end the politicization of the bank regulatory apparatus, because two democrat admins in a row haven't been able to keep their hands out of the cookie jar (Trump ended OCP1.0 in his first term). This will happen again and again...

We need a law on the books that stipulates that bank regulators cannot quash a specific legal industry just because it is politically disfavored. Choke Point style behavior has now targeted over a dozen industries, with crypto just one victim among many.

More resources for those curious. In 2021 I sat down with @ismurray to cover the history of OCP1.0. He wrote a great paper on OCP 1.0: cei.org/wp-content/upl…

onthebrink-podcast.com/ocp-murray/

@ismurray In April 2023 after OCP2.0 became clear the law firm Cooper and Kirk wrote a paper on how OCP2.0 is unconstitutional: cooperkirk.com/wp-content/upl…

onthebrink-podcast.com/thompsonocp/

@ismurray More recently, Coinbase FOIAed the FDIC and received documents summarizing a systematic FDIC campaign to get banks to de-bank crypto startups - hard evidence of OCP2.0

https://x.com/iampaulgrewal/status/1806299309836746909

Last week, Rep French Hill asked FDIC Chair Gruenberg under oath whether the FDIC was in the habit of sending verbal guidance to banks to have them derisk crypto. He says no. We know that he's not telling the truth. Rep Hill has vowed to get to the bottom of it if he gets the chair of the House FinServ Cmte

https://x.com/nic__carter/status/1859272607125696884

@ismurray Trump has specifically vowed to end OCP2.0 – used the term directly in his speech in Nashville. I believe he will end it on day 1, but we need to go further and push for full investigations and legislation ensuring it can't happen again

theinformation.com/articles/crypt…

walling off banks from crypto makes the system _more_ fragile, not less. the SAB121 rule prohibiting banks from custodying crypto means that big custodians like BNY mellon can't enter the market. they would be manifestly more competent than the crypto firms that sprung up instead.

maintaining the anti-crypto posture meant that only boutiques were willing to serve crypto and ended up with high deposit concentration.

in an ordinary regime, banks would be free to serve crypto firms at their pleasure, meaning less deposit concentration.