My Twitter feed is full of a new right-wing grievance: Choke Point 2.0. Naturally I had to figure out what it was all about.
First, though, a tiny bit of background. Back in 2013 the Department of Justice started going after online payday lenders they suspected of fraud. They did this primarily by pressuring banks and third-party payment systems to cut them off, and eventually this was given a name: Operation Choke Point. It operated for four years until it was killed off in 2017.
OCP generated a small bit of controversy after it expanded to go after porn stars, gun shops, and a few other things, but not much. That's why you've probably never heard of it.
So what is OCP 2.0? Yesterday Marc Andreessen was on Joe Rogan's show and, after explaining the original OCP, unleashed this MAGA bombshell:
This administration extended that concept to apply it to tech founders, crypto founders, and then just generally political opponents.... Choke Point 1.0 was fifteen years ago against the pot and the guns. Choke Point 2.0 is primarily against their political enemies and then to their disfavored tech startups. It's hit the tech world—we've had like 30 founders debanked in the last four years.
Really?
Yeah yeah yeah, it's been a big recurring pattern.... By the way, no due process, none of this is written down, there's no rules, there's no courts, there's no decision process, there's no appeal. Who do you appeal to?
And that's it. Andreessen provided no evidence for this, no names of the debanked, and then Rogan moved on.
So is this for real? As a general conspiracy theory it's been around for a couple of years, mostly among crypto enthusiasts who claim that government action against certain crypto-friendly banks—Silicon Valley Bank, Signature Bank, and Silvergate Bank in particular—and certain crypto firms—Ripple Labs, Binance, Coinbase—is evidence of a wide-ranging effort to crush legal crypto activity.
Maybe. But as a few level-headed observers have pointed out, the crypto industry is not exactly sunshine and unicorns. Among many others, FTX, Terra/LUNA, Three Arrows, Genesis, Voyager, Celsius, and BlockFi have all failed, mostly due to fraud of various kinds. If there were any industry in the world the Department of Justice might take a keen interest in, crypto would be it. No conspiracy theory needed.
But even if this really were the fruit of anti-crypto sentiment, it still doesn't confirm Andreessen's sensational claim that 30 founders he personally knows (presumably because they were funded by Andreessen Horowitz) have been deliberately debanked. That's a whole different thing. So far I've been unable to find anyone else who's said anything remotely similar.
So that's where we are. If you hear about Operation Choke Point 2.0, it's usually a claim that government actions against crypto firms aren't just periodic regulatory busts against bad actors, but are part of a coordinated effort to kill off crypto. In other words, a garden variety conspiracy theory.
But if you hear the Andreessen version, it's about Joe Biden weaponizing the government to go after both his political enemies and "disfavored tech startups"—whatever those are. That's a whole different level of derangement.
For some actual analysis on Operation Chokepoint 2.0 see https://www.nasdaq.com/articles/operation-choke-point-2.0:-how-u.s.-regulators-fight-bitcoin-with-financial-censorship.
My personal opinion:
1. Most crypto is bullshit. The fair value of all non-utility coins is 0. NFTs probably have value as art in the same way as a banana taped to a wall or a shredded Banksy painting has value (https://en.wikipedia.org/wiki/Love_is_in_the_Bin). Stablecoins have value based on the value of their collateral, so full value if fully collateralized.
2. I could be wrong.
3. Financial frauds and unregistered security offerings should be prosecuted and such prosecution should be agnostic to whether or not they involve crypto.
4. Denial or restriction of access to banks and other parts of the financial system should not be used by the government to harass legal businesses including crypto, firearms, marijuana, porn, compensated dating (if legal), etc.
5. Except in obvious cases, financial system players should not be asked to decide what is legal because if they must do so they will always err on the side of strictness because penalties for enabling illegal acts are far higher than the potential profits. So, if I tell a bank "My source of funds is illegal." or "My source of funds is breaking into rich people's houses and taking their possessions for redistribution to the poor." then sure, do not provide services. But if it is "I run a site for people to advertise their willingness to accept money in return for first dates" (https://www.whatsyourprice.com/), well, that is obviously prostitution adjacent but not obviously illegal in and of itself. It is up to the government to prosecute if this is illegal. They should not use financial harrassment to try to shut these people down without due process, right of appeal, etc.
6. In those cases where a person or business is denied access to the financial system due to regulatory / KYC / AML concerns there should be a way to appeal to the government and if necessary the courts to get some kind of no-objection letter that indicates that financial players can do business with this person. In order to deter government overreach and frivolous appeals this should probably be on a loser pays basis.
7. Any denial of access to the banking system by financial industry players should be based on legitimate business issues, not unpopularity, etc. So it is perfectly reasonable for a bank to terminate an account because of bouncing checks, but not because the holder is generally horrible (ie. Alex Jones, JVP, etc.)
I'm amazed, I agree on every point except the last one. If Hobby Lobby can refuse to do custom work for gay folks because "Hobby Lobby believes" that its Lord and Savior hates gays, Chase Bank should be able to ban someone from opening an account because they think the would be customer is a Crypto swindler. Now if there is a pattern of gender or race or ableness discrimination, then yep go after the bank.
But if we accept that "a corporation" can have a "political opinion" and give unlimited funds to a political candidate that the corporation "thinks" supports its "political opinions" [this is, granted, a reductio ad absurdum of Citizens United] then it makes consistency "sense" that that same corporation can "dislike" a customer enough to refuse to do business with them as long as the customer isn't in a protected class.
If we're gonna' anthropomorphize legal entities in ways that benefit Republicans, let's also anthropomorphize them in ways that benefit Democrats.
It is well established law that boycotts / refusals to do ordinary business are not speech. So, for example, banning boycotts of Israel is not a restriction on speech.
You have a better argument on custom work or work where the financial institution is putting its reputation on the line as well. So underwriting an IPO or a bond offering should arguably remain voluntary.
BTW, the issue is speech, not custom work. So a contractor can refuse to build a sign promoting a gay wedding but cannot refuse to build an outdoor stage for a gay wedding.
So those restaurant signs "We Reserve the Right to Refuse Service to Anyone" are illegal? Why then are they also Ubiquitous?
And I agree with Yehouda. "Media Corporations" are increasingly nothing more than mouthpieces for their Billionaire Owners. If they want the protection to say whatever they want, they should be forced to forego the wealth protections against slander and fraud that the corporate structure gives them.
The sign itself is not illegal.
Refusing service to anyone may or may not be illegal depending on who and why. For example, under current US law, refusing service to left handed people would not be illegal but refusing service to people without a left hand would be illegal.
For some entities (ie. mobile phone companies) they must offer service to anyone with limited exceptions such as those who attempt to damage their networks.
In general, the government can require any business or person to offer universal service except in cases where that service is expressive.
Wrong: https://firstamendment.mtsu.edu/article/boycotts/
Relieved to learn that the cops can’t show up at my door and force me to eat a Chik-Fil-A …
I overstated — courts have held that boycotts ‘do not raise First Amendment issues’, so it’s fair to say that boycotts ‘are not speech’. But to therefore conclude that “banning boycotts of Israel is not a restriction on speech” is beside the point; the government has no inherent power to ban boycotts, as those are choices by individuals of with whom they will do business, as a collective action. And in fact, the ‘anti-BDS laws’ do not ban boycotts; they instead attempt to sanction businesses that declare their participation in boycotts.
Same would then seem to apply to laws that require vendors (including individuals) to verify that they do not discriminate based on race, no?
Your sources no longer appear to be good law.
For example, your First Amendment rights do not extend to refusing to provide goods or services for same sex weddings unless your actions are expressive. So, in many jurisdictions a contractor cannot refuse to build the stage but can probably refuse to build a sign saying "Wedding of Adam and Steve".
Really, the constitution needs an amendment saying:
"An entity that can be owned does not count as a person."
That will kill corpration as a person and possible similar tricks.
Corporations need to be able to act as legal entities, own staff and be able to enter contracts and enforce them. It may be useful to give them other rights, but not based on them being "person".
Why, precisely?
For example, should corporations have First Amendment rights? If not, there goes most of the First Amendment.
???? You write this as if it is self-evident. Why do you think it is self-evident? Firms are a legal fiction.
Make the same argument for the 2nd Amendment. Looks pretty silly doesn't it.
Got it. So Trump can shut down the NYT on Jan 20 and the NYT has no recourse since as a non-person it cannot even sue.
"An entity that can be owned does not count as a person."
Hmm, this would mean that slaves (pardon me, enslaved people) are not persons. Even the Founding Fathers gave them 3/5 person status. Not sure how significant that would be in this day and age.
I am taking it as obvious that it is a agreed that a person cannot be owned.
"Even the Founding Fathers gave them 3/5 person status."
I apologize for being pedantic, but the Founding Fathers did not give enlaved people "3/5 person status." They gave slave states more representatives in Congress than was otherwise warranted by counting enslaved people as 3/5 per capita for the purpose of figuring out population for how many reps a state got.
This was done as a sop to asshole slave states who would have otherwise torched the efforts to make a united states; the moral thing to do (short of banning slavery entirely) would have been to count slaves as not three-fifths or two-fifths but as zero-fifths so as not to let slavers use owning people as a means to enhance their leverage in Congress over both abolotionists and owned people.
It's aggravating when people cite the 3/5 thing as an example of the Founders dehumanizing slaves, as the reality is that had slaves been fully counted (despite having zero access to the franchise), it would have given the slavers an even greater grip on power.
The problem with that is that not all corporations are business corporations. The ACLU, for instance, is a corporation. Political parties are corporations.
There's also the matter that corporations are simply organizations of people. If you deny a corporation first amendment rights, you are denying the shareholders as a group first amendment rights.
A far better approach is to recognize that money is not speech, which means that donations to political organizations are not speech.
ACLU is a "nonprofit civil rights organization ", which can be handles specially.
Same about political parties, not sure what kind of organization they are.
I don't know what "organizations of people" means here. Associations cannot be owned, so are not covered.
Recognizing that money is not a speech is indepently a good idea.
I thought I made it clear; a business corporation is an organization of shareholders.
Churches and charities are simply organizations of people, and as groups they are explicitly (and correctly, I would say) denied First Amendment rights as regards political campaigns.
Money isn't speech. Got it.
So it's OK for the new Republican majority to pass a law banning anyone from paying the NYT for advertising.
There are other constitutional principles, such as equality before the law. If Congress wanted to ban all paid advertising, that would be really bad policy but maybe not unconstitutional. Specifically banning paid advertising in the New York Times would be a violation of equality rights and would also be a bill of attainder.
Can you please point to the "equality rights" amendment in the Constitution and then explain how it would apply to corporations if they are no longer persons with Constitutional rights?
As for bills of attainder, same issue right? Not a person. No constitutional rights. No bill of attainder problem.
Or just do it California style and apply it just to the largest newspaper in the US to promote more diversity of newspapers. It is just a coincidence that the paper that cannot sell advertising is one whose politics you find odious.
You obviously misunderstood. I'm arguing AGAINST the proposition that corporations shouldn't have rights and FOR the proposition that money isn't speech.
"Really, the constitution needs an amendment saying:
'An entity that can be owned does not count as a person.'"
This doesn't solve nearly as much as you might think. First, a corporation has to have some rights (a corporation has to be able to enter into contracts, be able to buy and sell property, be able to go to court, etc.), so "personhood" really isn't the issue--it's the scope of those rights. I think it would be good if corporations didn't have category mismatch rights (such as religious liberty), and I think that we all agree they shouldn't be able to vote, but that has little to do with whether or not they are property or person.
Second, look how much Elon Musk impacted the election by spending a lot of money (albeit a rounding error of his wealth) in support of Trump; the issue there wasn't whether or not Musk is a natural, flesh-and-blood person or a corporation, but whether it's a good thing for one assholish entity to be able to spend that much on an election. Stripping rights from corporations does zip to constrain the bad acts of the wealthy owners of said corporations.
In a free market with large numbers of "buyers" and "sellers" there is generally little issue with allowing market participants to arbitrarily decide they don't want to do business with certain other participants. If one bank doesn't want to do business with you, there's always another bank. However, when the federal government is pressuring all the banks to refuse to do business with you, there may not be another bank.
In other words, I have no problem with one financial industry player deciding they don't want to do business with a particular customer. I have a big problem with all the financial industry players deciding they don't want to do business with a particular customer.
Where do you draw the line?
The agencies responsible for enforcing laws against price-fixing and similar anti-social market behavior have answered that question. The answer is, of course, not simple or concise enough to post in this forum. However, it is obviously across the line if the federal government is organizing all the major financial institutions in the country or in a particular region of the country into, effectively, one massive cartel structured to deny financial services to particular individuals or organizations.
Money for first dates seems pretty criminal.
Especially since it's legal to pay someone to accompany you to an event, and do so repeatedly.
You seem to be contradicting yourself.
It seems pretty legal if that is all it is.
Gets iffy if their customer support is fielding calls like "I gave him a blow job and he didn't pay. Pleae kick him off your platform."
Fact dependent....
"... to harass legal businesses including crypto, firearms, marijuana, porn, compensated dating (if legal), etc. "
As I understand it selling marijuana remains a federal crime so there are no legal marijuana businesses.
Correct. Everybody engaging in the marijauna business is taking a big risk by gambling that the federal government will forever not bother enforcement. Maybe they are right, maybe they are wrong, but it's entirely proper for a bank to decline to provide financial services to a pot shop on that basis; it's also entirely proper for the federal government to lean on banks to get them to so decline.
For chrissakes, it's not like we get upset when a bank declines to provide a line of credit to a meth operation or give a business checking account to a ransomware outfit. If people are angry that the federal government is discouraging banks from working with federally illegal marijauna businesses, they should engage in the democratic process and change the law, not spread conspiracy theories.
IMO *all* crypto is either fraud directly or used to enable other crimes. Nobody has come up with a single legitimate use case. The fact of the matter is that credit cards, paypal, venmo, checks, and wire transfer are all better and cheaper ways to move money unless your intent is to hide money from law enforcement or simply scam somebody. Credit to banksy, {s}he pretty much signs the artworks "This is a complete fraud that only a fool would pay big money for", and it works!
We need to make small changes to our vocabulary in the age of Trump. Bribery is really anticipatory gratuity. Fraud is just capitalism aggressively pursued.
Voilà !
Updating Ambrose Bierce?
I doff my hat to the master.
A corrupt person is merely transactional.
Obviously this is the fault of the Democrats.
I can begin to understand why it was called "Mosaic".........
I've gotten to the point where I just reject even engaging with Trumpists because I refuse to accept the premise.
The premise being, that they are speaking in good faith and sincerely believe what they say.
They don't. They are like Creationists where the conclusion is the premise and everything is just a Gish Gallop of lies and distortions and logic doesn't work because they didn't start there in the first place.
I generally concur, except that I think a lot of them DO believe what they say. They really DO believe that there is a vast conspiracy of non-White, non-Christianist, non-heterosexuals with a huge number of uppity women in leadership positions that is OUT TO GET THEM, and that because they are the VICTIMS in this situation ANY actions by them are legitimate, including doing all the things they accuse others of and up to and including mass violence.
Of course, it's almost certain that a lot of this is "motivated belief" -- they believe it because they WANT to -- and that a a lot of it is response to social saturation and propaganda -- it's all they hear, from Fox, from Facebook and from their friends -- but the end result is that they sincerely BELIEVE.
The clever ones, of course, do not. They're manipulating the (much larger number of), ahem, less clever ones, robbing them blind, and then blaming the robbery on the Vast Librul Conspiracy. And it is THOSE people who are going to be largely in charge over the next four years.
Thanks again, Republicans!
I agree with you, though it took me a while to get here as I long believed what Chip believes, roughly that they are just builshitting to justify getting away with the crimes they want to get away with. But, I now think that a lot of these guys, very much including Adreessen believe this shit.
With that said, what could go wrong with leaving a multi-trillion dollar crypto market completely unregulated? When it goes bust, and it will, it will, somehow, definitely be the fault of the dirty socialist liberal hippies.
"But, I now think that a lot of these guys, very much including Adreessen believe this shit."
What is the evidence for it?
Jerry, just remember. It's not a lie ... if you believe it.
I don’t engage with Trumpers either, because they are just trolls you meet in real life instead of online, and the best way to deal with them is to ignore them.
But now that Trumpers are taking over government, I’ll have to engage with them whenever I have to deal with the government… at least until they disable government from working so it’s a waste of time to get them involved in anything. (Can’t wait for the firing of half of federal employees, and the subsequent bitching about how long it takes Medicare claims to be processed or FEMA to respond to hurricanes or airplanes to be landed at airports.)
Ugh. Thanks Republicans for inflicting another four years (or more!) of nonstop unavoidable performative assholery on us.
How exactly did the government "pressure" banks? Isn't this the key issue, and it never seems to be dealt with.
Somebody said something mean to a banker and he ran home to cry in his 50th floor corner office, comforted only by his $200m compensation package.
"This outfit consists of crooks who are engaged in fraud. If you don't want your bank to be a party to fraud, I suggest you quit doing business with this outfit."
What 'lawnorder' said.
Somebody (on Twitter) is trying to use Freedom of Information requests to chase down who has been doing it. Although this is at the allegation stage now, I lean towards YES; it is as Marc A described.
I speculate that a paper trail exists, that the paper trail will lead back to those in government who control/regulate banking, and that once the financial details of those folks are uncovered, there will be some suspicious large deposits originated from Big Banking. And then the lawsuits and prosecutions will begin.
Who has been doing what? And when have right wing conspiracy theories ever actually been supported by solid evidence?
"I speculate"
Well ok then.
And if that warning came from a regulator, it seems to me exactly what a regulator should be doing.
There's that whole pesky due process thing that should not be ignored. If a regulator believes a particular business is engaged in fraud or other illegalities, then legal proceedings against that organization are in order. Simply taking steps to isolate the suspect business from the financial system amounts to punishment without trial.
“If a regulator believes a particular business is engaged in fraud or other illegalities,” the warning to banks may be intended to allow them to avoid criminal charges under RICO or the like. The government has been very reluctant to bring charges against FIRE sector companies, ever since the collapse of Arthur Andersen. The business press still blames the Feds for Andersen’s demise, not the firm’s own misconduct. It may not be the purest of motives, but it isn’t necessarily corrupt.
Denying due process may not always be corrupt, but it IS always wrong.
"the warning to banks may be intended to allow them to avoid criminal charges under RICO or the like."
Or, to make it that much easier for the feds to build a case against the bank later, if the bank was given such a warning, and nonetheless went ahead and aided the fraudulent entity.
Either way, I don't have a problem with it. Financial institutions have an incentive to listen to the feds, but if the warning is cryptic or unfounded, or something the institution's own research refutes, they also have an incentive to ignore the warning.
If you ask me, Kevin has had less intricate but more interesting posts. I can't keep up with wingnut memes, and maybe this one could have passed unnoticed. As he says, you may not have heard of this at all. Well, good.
Would you change your mind, Kevin, if you heard that this same rulebook is used to debank anyone who is linked to porn?
Or is it basically OK to use federal power against groups we don't like, without any actual legal basis or right of appeal, just so long as they are not on the intersectionality master list of protected groups?
Here's an article about this in the UK. I know the UK is not the US, but since the Gruniad is the official paper of record for western communists, I assume it's not going to also be claimed to be part of this conspiracy.
Here's a US version. Happy to believe this one since, in it, the villains are Republicans?
https://tennesseestar.com/news/choke-point-2-0-bank-regulators-cut-porn-industry-off-from-banks-states-pass-age-limits-to-porn/jtnews/2023/08/26/
I don't particularly have a problem with attempts to limit both crypto and porn. But I do have a problem with the government doing this in secret without any clear rules, and with team D then insisting that even mentioning this is "conspiracy theory".
And it's a bit rich for someone to mock the concept of "weaponizing the government" given what we have just seen Newsom do to Tesla in CA...
But you would be OK doing the same thing, because of due diligence?
The Tennessee Star is a garbage right wing puke funnel that only morons and you (but I repeat myself) would believe.
Ah yes, insults and claims of "conspiracy theory". How's that working out for you?
https://www.nbcnews.com/politics/2024-election/republicans-float-conspiracy-theory-biden-wont-ballot-rcna121467
Read the above.
Those crazy Republicans and their conspiracy theories! Is there no limit to their nonsense? Good thing we dismissed it all, makes us look responsible and knowledgeable.
Shorter: Marc Andreessen is an idiot who thinks he's smart because he's rich.
Lots of those.
I don't know whether this is true, and I was too lazy to Google it when I saw it, but a post on BlueSky a couple of days ago said that Andreesen was pissed because the CFPB took enforcement action against a FinTech startup that A*z funded heavily. The firm was ripping off poor people and he's pissed because they got caught.
Once again, I don't know whether or not this is true, but it sure is truthy.
The purpose of FinTech is to disrupt Big Banks. I remember when being on the Left meant one hated Big Banks. The Left of the '70's that I remember would be cheering anybody trying to legally disrupt Big Banking.
That said, do you have a link to a legitimate article that explains the exact A*z-funded company which was supposedly ripping off poor people? Did it go to trial or was it just an allegation? Because I remember when being on Left meant thinking that somebody was innocent until proven guilty.
'Andreessen provided no evidence for this, no names of the debanked, and then Rogan moved on.'
Well, yeah, it was a podcast, not a court cross-examination.
Several days passed and then Marc A provided a long thread about debanking. Evidence provided, names named.
https://x.com/pmarca/status/1862635456204341739
For the very few following comments who want to read serious analysis of what this is about, before Kevin goes through the inevitable:
Step 1: It's not really happening
Step 2: Yeah, it's happening, but it's not a big deal
Step 3: It's a good thing, actually
Step 4: People freaking out about it are the real problem
Melania and Barron were debanked Trump also was, but hitting his family will generate rather more of a "You will be punished" than the personal hit against him.
https://x.com/pmarca/status/1862618342374433155
Here's a list of MANY MANY articles on the subject, including one from a little organization you may have heard of called the NYT
https://x.com/pmarca/status/1862635456204341739
https://www.nytimes.com/2023/04/08/your-money/bank-account-suspicious-activity.html
Here's a discussion in the context of, specifically, Meta:
https://x.com/davidmarcus/status/1862654506774810641
And here's a discussion of why this may well blow up in D's faces. As is always the case, people forget that once you create a political weapon, what happens when your enemies get hold of that weapon...?
https://x.com/ConradBastable/status/1862692540568178708
Like I said, the tone here regarding Chokepoint 2.0 is going to evolve to
Step 2: Yeah, it's happening, but it's not a big deal
Step 3: It's a good thing, actually
Step 4: People freaking out about it are the real problem
So that even as the usual crowd are trying to push steps 3 and 4, the eye of Sauron (the same eye you're justifying as great and glorious) is going to be pointed at groups to which you have rather more sympathy...