David Sacks Celebrates Regulatory Change for Crypto

David Sacks, the White House crypto czar, celebrated a significant victory today. He announced that the Federal Deposit Insurance Corporation (FDIC) is following the U.S. Office of the Comptroller of the Currency (OCC) in removing “reputational risk” as a factor in bank supervision. This change effectively rolls back the controversial Operation Chokepoint 2.0 policies, which had led to the unfair debanking of crypto companies.

Sacks stated that this is a big step forward for crypto. Operation Chokepoint 2.0, which enjoyed support from figures like Senator Elizabeth Warren, used vague criteria like “reputational risk” to target crypto businesses, allowing institutions to be punished for negative publicity, regardless of its truth. The new policy change will promote more objective and fair banking criteria, protecting the crypto sector from political influence.

Sacks also credited Senator Tim Scott for his leadership in pushing these changes, particularly through the Financial Institution Reform and Modernization (FIRM) Act. This move is anticipated to foster a better environment for crypto businesses and may lead to increased prices for digital assets in the future.

Fox Business’ Eleanor Terrett provided additional context, explaining why “regulation by enforcement” is ineffective. She noted that Ripple has spent between $150 million and $200 million in legal fees over the years, only to find itself in a similar position as when the SEC initially brought the lawsuit in 2020. The SEC likely spent taxpayer dollars as well.

> Here’s why regulation by enforcement is the least effective way to achieve regulatory clarity:
>
> Including the fine, @Ripple has shelled out somewhere between $150M – $200M in legal fees only to end up in more or less the same position it was in when the @SECGov brought the… https://t.co/7QUOM21XYR
> — Eleanor Terrett (@EleanorTerrett) March 25, 2025

XRP holders were adversely affected as exchanges removed the token, leading to a value drop. Many other crypto projects became hesitant to operate in the U.S. due to fears of SEC targeting. Terrett criticized SEC Chair Gary Gensler for concentrating resources on crypto firms while neglecting significant issues like FTX, 3AC, and Celsius, which caused real harm to investors.