Throat Lock Operation 2.0 Ends, Federal Reserve Withdraws Crypto Restrictions: A Delayed but Inevitable Institutional Shift

“Operation Chokepoint 2.0” has never been a conspiracy theory.

Previously declassified internal documents from the Federal Deposit Insurance Corporation (FDIC) show that in 2023, U.S. regulators indeed launched an organized de-banking campaign against the crypto industry.

That year, as Silvergate, Signature, and Silicon Valley Bank failed one after another, regulators used institutional friction to restrict banks from providing services to crypto companies, leading to limited liquidity and access in the industry. One of the core tools of this operation was a key policy statement from the Federal Reserve that year—classifying banks’ involvement in stablecoins, on-chain settlement, crypto custody, and related activities as “high-risk innovative activities,” and setting additional approval thresholds.

And just yesterday, this blockade was dismantled by the Federal Reserve. The latest news indicates that the Fed has officially revoked the restrictive policies issued in 2023. This is not a sudden “friendlier” regulatory stance, but rather a recognition that the previous isolation strategies are no longer sufficient to cope with the rapidly evolving on-chain capital flows and industry realities.

( Emerging Risks

Over the past year, one fact has become increasingly clear:

· The scale of stablecoins continues to grow

· On-chain USD settlements are becoming more frequent

· Capital flows have not returned to the banking system

The most significant USD settlement activities are actually occurring in regions with weaker regulatory reach. This has turned the original “risk prevention” isolation strategy into a reverse systemic risk generator.

Against this backdrop, the Federal Reserve recently officially revoked its restrictive policy statement from 2023, bringing banks’ involvement in crypto-related activities back into the routine prudential regulatory framework.

) Custodia’s Counterattack

The direct consequence of isolation policies and Operation Chokepoint is that some crypto banks cannot access the USD settlement system. Custodia Bank is a prime example. This bank, focused on crypto custody, applied for a Federal Reserve main account for three years but was repeatedly denied approval and excluded from the USD clearing system.

Recently, Custodia has filed a petition for a full panel rehearing with the Tenth Circuit Court of Appeals, requesting a reconsideration of the previous rejection of its main account application. Although no ruling has been issued yet, this lawsuit itself has become an important window into the shift in U.S. regulatory logic: the market can observe whether regulation is gradually transitioning from “generally not allowed” to “compliance approval.”

How Regulation “Governs”

Almost simultaneously, the SEC issued a statement titled “Regarding the Custody of Crypto Assets by Broker-Dealers.” The document indicates that regulation is no longer about whether to allow but systematically defining:

· How private keys should be managed

· How to assess blockchain technology risks

· How to respond to extreme scenarios like 51% attacks and hard forks

Crypto-related activities are no longer viewed as “exceptions,” but as routine risks within the financial system that can be regulated.

Systemic Shift

Looking at recent events together reveals a clear trend:

· The Federal Reserve revokes special restrictions on crypto

· The SEC provides a custody operation framework

· The OCC expands recognition of stablecoins and custody institutions

· Regulatory focus shifts from blocking to structured management

Regulatory focus is moving from outright blocking to modular, structured oversight: settlement, custody, clearing, and risk control are now the components of regulation, no longer isolated.

Re-entry

In 2023, U.S. regulators chose to “keep crypto out.”

By 2025, they realized: long-term absence itself is the greatest risk.

This is not a victory for any one party, but a recognition of reality—when on-chain USD has become part of global capital flows, the only choice for regulators is not to ignore it but to re-engage.

Real change will not be reflected in short-term market movements but in who is allowed to participate in the next phase of USD settlement and custody systems.

And this is the core significance of this policy adjustment.

This article is for informational purposes only and does not constitute investment advice. Markets are risky; invest cautiously.