The US Federal Reserve’s Michael Barr is set to resign as vice chair for supervision, marking the latest exit by an official apparently linked to “Operation Chokepoint 2.0” — a purported federal effort to debank crypto companies.
Barr’s resignation will take effect on Feb. 28 or earlier, if a successor is appointed, he said in a Jan. 6 letter addressed to President Joe Biden.
Barr will continue to serve as a member of the Federal Reserve Board of Governors.
Barr’s resignation letter to President Joe Biden. Source: Federal Reserve
Some crypto industry executives have viewed Barr as a key reason why many US banks have been hesitant to offer services to crypto firms, especially after a March 9, 2023 speech in which he seemingly confirmed the central bank’s outlook:
“We would likely view it as unsafe and unsound for banks to directly own crypto-assets on their balance sheets.”
His resignation appears to have galvanized some members of the crypto community.
“Michael Barr has completely failed to fulfill his duties as Vice Chair for Supervision at every turn, enabling Operation Chokepoint 2.0 and illegally increasing his power at the cost of Wyoming’s digital asset industry,” said Senator Cynthia Lummis in a Jan. 6 post on X.
In a Jan. 6 post on X, Custodia Bank CEO Caitlin Long referred to Barr as “THE FED’S DEBANKER-IN-CHIEF,” calling him one of the architects of Operation Chokepoint 2.0.
Source: Caitlin Long
His exit was also viewed positively by blockchain-focused Castle Island Ventures partner Nic Carter, who made up a wanted poster of anti-crypto public figures he held responsible for Operation Choke Point 2.0.
Carter observed that over half of them have announced their resignations, stepped down or been defeated in elections as President Joe Biden prepares to transition power to the incoming Donald Trump administration.
Those include Federal Deposit Insurance Corporation (FDIC) chair Martin Gruenberg, Securities and Exchange Commission’s chair Gary Gensler and Senator Sherrod Brown. This leaves Massachusetts Senator Elizabeth Warren, Federal Reserve board member Michael Gibson and Nellie Lang, Under Secretary of the Treasury for Domestic Finance, remaining on Carter’s anti-crypto list.
Source: Nic Carter
Still, Barr, who previously served as an adviser at blockchain payments firm Ripple, has pushed for responsible stablecoin regulation — something most industry pundits agree is necessary to advance crypto adoption in the US.
He also supervised the Federal Reserve’s research into central bank digital currencies.
Related: Death of Meta’s stablecoin project was ‘100% a political kill’ — Ex Diem boss
While US officials haven’t confirmed they tried to debank the crypto industry, a recent court order allowed crypto exchange Coinbase to obtain unredacted files from the FDIC to investigate its role in Operation Chokepoint 2.0.
“[There was a] coordinated effort to stop a wide variety of crypto activity — everything from basic BTC transactions to more complex offerings,” Coinbase’s chief legal officer Paul Grewal explained after reviewing the filings.
Former US prosecutor and cryptocurrency advocate John Deaton has offered to lead an investigation into Operation Chokepoint 2.0 for the incoming Trump administration.
“If these actions go unchallenged, it creates a dangerous precedent where regulatory bodies can quietly suppress entire industries they disfavor, stifling innovation, competition, and economic opportunity,” Deaton said in a Jan. 4 X post.
Barr was appointed as the Federal Reserve vice chair for supervision in July 2022, a role he noted was created after the Global Financial Crisis to provide responsibility, transparency and oversight of the financial system.
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