David Marcus, the former head of Facebook’s former stablecoin project Diem, has revealed new details about the startup’s collapse, claiming that political interference, not regulatory non-compliance, was the primary reason behind its collapse.
In a recent post on X (formerly Twitter), Marcus claimed that Diem, which initially launched as Libra, was on track for a limited launch in 2021 after clearing all regulatory concerns. However, he accused key figures in the US government of orchestrating the organization’s collapse.
Marcus specifically claimed that then-Treasury Secretary Janet Yellen privately warned Fed Chair Jay Powell that approving the Diem project would amount to “political suicide.” The Fed then reportedly pressured banks to sever ties with the project, effectively leaving the payments system to die.
This points to one of the most direct accusations, which links the government’s influence to the broader difficulty of using crypto in traditional financial systems.
Marcus’ comments reignited discussions about “Operation Chokepoint 2.0,” a term used by crypto advocates to describe allegations that the government is pressuring banks to sever ties with crypto firms.
Custodia Bank CEO Caitlin Long responded to Marcus’s comments by saying that her bank had faced similar targeting. “One day… I will be able to tell the real story of what the Fed did to Custodia Bank,” she wrote, accusing the Fed of corruption.
Prominent investor Marc Andreessen echoed similar sentiments in a recent interview, claiming that over 30 tech founders have been “debanked” over the past four years. Other crypto leaders, including Sam Kazemian, have accused major financial institutions like JPMorgan Chase of shutting down accounts linked to government-sponsored crypto assets.
Allegations against U.S. regulators and financial institutions are not new. Coinbase, one of the largest crypto exchanges, previously accused the Federal Deposit Insurance Corporation (FDIC) of discouraging banks from partnering with crypto firms through vague “safety and soundness” reviews.
*This is not investment advice.
