The Federal Deposit Insurance Corporation (FDIC) within the United States has released a statement that admitted its former participation and its intent to stop activities for Operation Choke Point, which had the effect of discriminating against gun stores and other unfavorable, yet legal businesses.
The U.S. Department of Justice still contends that Operation Choke Point was and is designed to reduce illegal fraud by “choking” illegal participants out of U.S. financial institutions. However, once the FDIC began enforcing the rules, many gun and firearm stores, along with other legal businesses, began having their banking relationships strained and even cut for unexplained reasons. The new FDIC letter explains the change in enforcement from straight bans and broad cutting of relationships to a more fine-tuned risk analysis.
“The FDIC is aware that some institutions may be hesitant to provide certain types of banking services due to concerns that they will be unable to comply with the associated requirements of the Bank Secrecy Act (BSA)….”, but will now be “encourage[ing] institutions to take a risk-based approach in assessing individual customer relationships rather than declining to provide banking services to entire categories of customers….”
In addition to this change, the FDIC will require that the bank examiners put any recommendation to end a banking relationship in writing, as well as explain what law or regulation they believe is or was being violated.
FDIC picking industry winners and losers
While Operation Check Point may have been created with the best intentions, the Congressional investigation revealed emails that showed FDIC investigators “scheming to influence banks’ decisions on who to do business … [to ensure] banks ‘get the message’ about the businesses the regulators don’t like, and pressuring banks to cut credit or close those accounts, effectively discouraging entire industries”. Further, U.S. Rep. Blaine Luetkemeyer (R-Mo.), who now sits on the U.S. House Financial Services Committee, said that “[t]he FDIC has allowed a culture within their agency to blossom that they believe it’s okay to impose their personal opinions and value system in a regulatory way”.
Signs and legislation are pointing towards these actions being corrected, but the fact that they occurred in the first place and were allowed to continue for so long, does not bode well for other branches of government and their respective regulatory agencies. The events illustrate the common saying that power corrupts so it is only a matter of time until a similar incident occurs again. Cryptocurrency was created to help prevent situations like this by creating market competition and giving consumers and merchants another place to go for money and financial access if government unfairly discriminates against them or does not treat them well.
Dash’s decentralized payment network does not discriminate or restrict access to certain businesses
Dash offers merchants in industries that are often taboo or face the threat of shadow discrimination by the likes of the FDIC an alternative that can actually be used for payments in everyday life. Dash has nearly 5,000 Masternodes and recently hit a new all-time high in hashrate power that went above 4 petahashes. This combined with implementation of Long-Living Masternode Quorums make the Dash network even less vulnerable to 51% attacks and control by single entities, which helps ensure that no personal opinions or vendettas will get in the way of a merchant or consumer using Dash as unbiased money.
Dash is already serving this purpose by being used by Alt36 and CoinLogiq and CoVault as a payment method for the U.S. cannabis industry that operates in a grey zone within the U.S. legal code and is often denied banking access. The fact the Dash enables payments in seconds for less than one cent makes Dash a preferred choice over other cryptocurrencies that might be fast and cheap, but not fast and cheap enough to compete with that of cash or traditional credit/debit cards, which is the standard to beat for merchants.