Large banks are making it hard and more expensive to use Fintech and Crypto apps for consumers, which can be seen as “Operation Chocopoint 3.0”.
According to Alex Rampail, General Partner in Venture Capital Firm Andresen Horovitz (A16Z)In its latest Fintech NewslatorRampael pointed to traditional financial institutions to take high fees to access account data or transfer money, especially for services such as coinbase or Robinhood, as a step to strangle the competition.
“Under the Biden administration, Operation Chokpoint 2.0 tried Debank and Deppletform Crypto,” Rampael said. He said, “This era is over, but now banks are aiming to implement their own Chokpoint 3.0 – taking high fees from madness to access data or transfer money to Crypto and Fintech apps – and, more and more, they do not like,” he said.
Chokepoint 2.0 specifically refers to the debuts of crypto businesses and officers, which results in pressure by regulatory officers such as the Federal Deposit Insurance Corp. (FDIC)After Donald Trump was elected US President, Chokpoint 2.0 expired as the regulators reversed several instructions made during the previous administration.
JP Morgan charges
JP Morgan Chase, one of the largest American banks, was excluded as an example.
Under the current US law, Section 1033 of the Dod-Frank Act, especially, has the right to reach their own financial data.
But banks are now controlling how that data is distributed electronically, sometimes charging for access to information as routing and account number as account number.
A16Z executive argued that such a strategy could transfer funds to alternative platforms, more expensive, preventing users and reduce competition.
“If it suddenly costs $ 10 to a crypto account, it costs $ 10,” Rampael wrote, “perhaps less people will do so. And if JPM and other consumers can prevent their own independent selected crypto and fintech apps from adding to their bank accounts, they effectively end up.”
Rampael’s words Mithun’s co-founder Tyler Tyler Vinklevos, who said that JP Morgan “insolvency” insolvency to charge the fintech platforms for access to customer banking data. “This is a kind of egoistic regulator occupation that kills innovation, damages the American consumer, and is bad for the US.”
Read more: Vinklevos claims that JP Morgan stopped Gemini after criticizing data access fees
JP Morgan has not addressed the stage directly, but addressed the criticism. The bank told Forbes About 2 billion monthly requests for user data come from third parties, and that it aims to curb misuse by charging the fees.
Meanwhile, Rampael, the Trump administration is calling from banks to prevent such practices, before they become standard among the rest of the financial institutions.
“In an ideal world, consumers will vote with their purse. But each bank will do so, and it will take years to get a new banking charter. In many banks, hostages do not have customers,” Rampael said.
He said, “We don’t need a new law; we just need to administration to prevent this callus and attempt to manipulate the consumer’s choice,” he said.
