The Supreme Court of the United States recently issued two crucial cases, the National Rifle Association of America v. Vullo (NRA) and Cantero, et al. v. Bank of America, N. A. (Cantero), which are expected to have a significant impact on Bitcoin and the crypto industry. In the NRA case, the Court addressed the issue of government coercion against disfavored industries, drawing parallels to Operation Choke Point 2.0, which targets crypto businesses through financial exclusion. The recent Cantero decision sheds light on how this legal framework may impact Custodia Bank’s appeal against the Federal Reserve’s denial of their master account.
The NRA case involved the NRA suing Maria Vullo, former superintendent of the New York DFS, accusing her of coercing financial institutions to sever ties with the NRA, thus suppressing their First Amendment rights. The Supreme Court ruled that government officials cannot use coercion to suppress speech or advocacy indirectly, highlighting the importance of protecting constitutional rights. This ruling has implications for Operation Choke Point 2.0, where regulators are allegedly targeting crypto businesses through coercion, similar to the original illegal Operation Choke Point.
Operation Choke Point was an initiative by the DOJ to deny banking services to legal but high-risk businesses, impacting industries like firearms dealers and payday lenders. Similarly, Operation Choke Point 2.0 targets crypto businesses, raising concerns about government overreach and suppression of dissenting viewpoints. The Supreme Court’s decision in the NRA case reinforces that coercion to suppress speech is unconstitutional and raises due process concerns for affected entities, including crypto businesses facing sudden restrictions.
The Cantero case involved Bank of America and the question of interest on escrow accounts under New York state law. The Supreme Court ruled that state laws interfering with national bank powers must be analyzed thoroughly, emphasizing the dual banking system in the U.S. The decision suggests that Custodia Bank may have a strong case in its appeal against the Federal Reserve’s denial of a master account, highlighting the need for a nuanced analysis aligned with federal laws.
Overall, the Supreme Court’s decisions in NRA and Cantero provide steps towards addressing federal overreach related to Bitcoin and the crypto industry. These decisions may be used to challenge Operation Choke Point 2.0 and de-banking of legal but disfavored industries. While small victories, these rulings highlight the importance of protecting constitutional rights and ensuring fair treatment for all businesses in the financial system.
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