Amidst a backdrop of growing tensions between traditional banking giants and the burgeoning fintech and crypto sectors, Andreessen Horowitz (a16z) has sounded the alarm on what it terms “Operation Chokepoint 3.0.” According to Alex Rampell, a general partner at the renowned venture capital firm, big banks are employing tactics that could stifle competition by making it increasingly costly and difficult for consumers to interact with crypto platforms like Coinbase and Robinhood.
The New Chokepoint?
Rampell, in a recent fintech newsletter, pointed to the actions of major banks, accusing them of charging exorbitant fees for accessing account data and moving money. “Under the Biden administration, Operation Chokepoint 2.0 tried to debank and deplatform crypto,” Rampell remarked, drawing parallels to previous efforts to curb crypto growth. While that phase has concluded, the banks appear to have taken matters into their own hands, implementing what Rampell dubs “Chokepoint 3.0.” This involves not just high fees but also the selective blocking of crypto and fintech apps they find unfavorable.
This isn’t just an isolated observation. Tyler Winklevoss, co-founder of Gemini, echoed Rampell’s concerns, suggesting that these fees could “bankrupt” fintech platforms. The backdrop is a legal landscape defined by Section 1033 of the Dodd-Frank Act, which assures consumers’ rights to access their financial data. Yet, banks like JPMorgan Chase have been criticized for the methods they deploy when controlling how this data is disseminated electronically. Interestingly, this comes at a time when JPMorgan & Coinbase Team Up: Crypto From Points, Bank-Linked Wallets Coming, signaling a complex relationship between traditional banks and crypto platforms.
The JPMorgan Controversy
JPMorgan Chase, one of the largest banking institutions in the United States, has found itself at the center of this controversy. They have been accused of charging fees to fintech platforms for accessing customer banking data, a move that some argue could deter competition and innovation. In a statement to Forbes, JPMorgan acknowledged the nearly 2 billion monthly data requests from third parties, justifying the fees as a way to prevent misuse.
Rampell warns that if it begins to cost $10 just to move $100 into a crypto account, consumer willingness to engage with these platforms may plummet. “If JPM and others can block consumers from connecting their own freely chosen crypto and fintech apps to their bank accounts, they effectively eliminate competition,” he wrote. This development is part of a broader shift in institutional posture towards crypto, as detailed in Coinbase, JPMorgan Deal Signals Shift in Institutional Posture Towards Crypto: Bernstein.
A Call for Action
Rampell is urging the current administration to take action, fearing that without intervention, such practices could become standard across the financial industry. He argues that, ideally, consumers would express their dissatisfaction through their financial choices. However, the reality is more complex. “Every bank will likely do this, and getting a new banking charter takes years. Many banks have hostages, not customers,” Rampell lamented.
The debate raises questions about the balance of power in financial services. While banks assert their right to protect data integrity and curb misuse, critics argue that these measures are thinly veiled attempts to stifle competition and innovation. The situation presents a conundrum: how to ensure consumer protection while fostering an open and competitive market.
Looking Ahead
The implications of “Operation Chokepoint 3.0” are far-reaching. If unchecked, it could reshape the landscape of digital finance in the United States, potentially hampering the growth of crypto and fintech industries that have thrived on innovation and accessibility. The coming months will likely see increased scrutiny from regulators and policymakers. Whether this scrutiny translates into tangible action remains to be seen.
As the debate unfolds, stakeholders from all sides will need to grapple with the central question: Can a balance be struck that protects consumer data and choice while fostering a competitive environment? Only time will tell if these banking giants and the fintech sector can coexist or if this clash will lead to a regulatory showdown.
Source
This article is based on: ‘Chokepoint 3.0’ Has Arrived? a16z Warns of Anti-Crypto Bank Tactics
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
