Key Takeaways from the Operation Chokepoint 2.0 Congressional Hearings

The recent Congressional hearings on Operation Chokepoint 2.0 exposed deep political divisions over whether the Biden administration intentionally pressured banks to deny services to crypto firms. However, despite the partisan clashes, some surprising points of agreement emerged.

🔑 Key Debates

• Republican Allegations: GOP lawmakers argued that regulators “bullied” banks into cutting off crypto firms, using vague guidelines, verbal warnings, and reputational risk threats. Coinbase’s legal officer described an “onslaught” of regulatory pressure, while MARA Holdings’ CEO testified that his company’s bank accounts were abruptly shut down.

• Democratic Response: Democrats dismissed these claims as a “manufactured narrative”.

👨‍🎓 Expert Opinions

• Skepticism on a Coordinated Effort: Some legal experts argued that crypto de-banking was a natural consequence of financial regulations, not an orchestrated effort. Yale researcher Steven Kelly noted that regulatory concerns over crypto were justified, citing the 2022 collapses of Silvergate and Signature Bank.

• Claims of Regulatory Overreach: Others, including attorney Stephen Gannon, pointed to Senate testimony and internal Federal Reserve and FDIC documents as proof that regulators had indeed pressured banks against servicing crypto firms.

🤝 Points of Agreement

Despite their differences, both parties and witnesses found common ground on regulatory reforms:

1. Written Guidance: All regulatory instructions should be documented—verbal guidance and subjective warnings should be prohibited.

2. Transparency: Banking regulations should be publicly available on a trailing basis to ensure accountability.

3. Fairness: Banks should be required to provide written explanations when denying services to a business.

4. Reputational Risk Reform: Subjective “management and reputational risk” ratings should be abolished to prevent abuse.

5. Oversight: Banking regulators should be subject to external review, just as students are graded by professors, argued witness Austin Campbell.

In closing, Rep. Green asked all witnesses if they agreed that clearer crypto regulations were necessary — they all raised their hands, signaling rare bipartisan consensus on at least one issue.

⛏️ In The News

• US Bitcoin mining companies face profitability challenges due to Bitmain ASIC shipment delays caused by US-China trade tensions, rising mining difficulty, and falling hash prices, putting older hardware at risk.

• Riot Platforms appointed three new board members, including former Hut 8 CEO Jaime Leverton, to explore AI and high-performance computing opportunities, though the company cautions that a successful transition is not guaranteed.

• A solo Bitcoin miner successfully mined block 883,181 while Bitcoin rebounded above $98,000 following a dip triggered by new US tariffs announced by President Trump.

• Japanese gaming company Gumi purchased $6.6m worth of BTC to strengthen its Web3 position, joining a growing trend of public companies holding BTC.

📆 Miner Reporting

👁️ IREN Q2

• Revenue of $119.59m, marking a 184% YoY increase, with revenue surpassing estimates by $1.23m. Operating cash flow of $53.7m and net profit after tax of $18.9m, a significant turnaround from a $51.7m loss in Q1.

• Bitcoin mining revenue surged to $113.5m in Q2, up from $49.6m in Q1. 1,347 BTC mined in Q2, up from 813 in Q1, while net electricity costs remained flat at $28.9m despite an 85% increase in operating hashrate.

• Net electricity cost per Bitcoin mined dropped 39% to $21,418, reflecting efficiency improvements from the shift to spot pricing at Childress.

• Adjusted EBITDA reached $62.6m in Q2 with a 52% margin, up from just $2.6m in Q1, reflecting strong operational efficiency.

• $427.3m in cash and cash equivalents as of December 31, 2024, alongside a $440m convertible note issued on December 6, 2024.

• New 75MW liquid-cooled data center at Childress for AI/HPC, designed for NVIDIA Blackwell chips with 200kW rack density, targeting multi-tenant colocation, completion expected in H2 2025.

• 600MW Sweetwater 2 site development underway, expected to form a 2GW data center hub, with grid-connection agreements being finalized and energization set for 2028.

• Bitcoin mining expansion from 31 EH/s to 52 EH/s in H1 2025, adjusted from a prior 57 EH/s target due to Horizon 1’s development.

🐝 HIVE FY 2024

• Hive Digital reported $29.2m in revenue for Q4 2024, with $2.5m coming from its HPC business. Adjusted earnings were $17.3m, with a net income of $1.3 million after tax.

• Hive mined 322 BTC during the quarter, increasing its BTC holdings to 2,805 BTC, valued at $260.8m.

• The company’s BTC reserves grew 263% YoY, making it one of the 15 largest corporate BTC holders. Hive ended the quarter with $270.7m in cash and crypto holdings.

• The company has strategically used its BTC holdings to fund expansion, including its Paraguay facility.

• Hive is expanding beyond Bitcoin mining into AI and HPC, repurposing Nvidia GPUs for AI workloads.

• The company acquired a 200 MW facility in Paraguay from Bitfarms for $85m in January. Hive plans to relocate from Vancouver, Canada, to Texas following Donald Trump’s presidential victory.