The American Securities and Exchange committee, under former president Gary Gensler, used colonies to put pressure on the founders of decentralized financing platforms to always work in the industry, according to the partner of the founders of the venture capital company Joey Krug.
“What people do not really know is that the government, in many cases, went to the founders of the DEFI protocols (…) and essentially told the founders that you had to do a settlement with us,” Krug on stage said at the Ethdenver conference on February 27.
“In many cases, they said you should also sign something that says you will never work in crypto again,” he added. “By the way, this agreement, you can’t really talk about it publicly because there is a non-negotiation clause.”
Krug’s complaint adds to a rumor of the cryptographic industry nicknamed “Operation Chokepoint 2.0” which indicates that the Biden administration has tried to kill the local industry through measures to apply regulators and put pressure on banks to cut or limit services to cryptographic companies.
“These agencies would essentially go to the founders, and they would say:” Hey, if you do not accept that, you will simply find yourself in prison. “”
Krug said such civil agencies should rely on the Ministry of Justice to make criminal accusations, but “none of these questions has yet been referred to the Doj.” He also said that “none of these founders breaks the law.”
Krug said that at the beginning, he “did not really believe” such colonies existed, but some founders – which he did not name – later showed him their agreements.
Joey Krug (left) on stage with Brady Dale (right) from Axios to Ethdenver 2025. Source: Turner Wright / Cointelegraph
“Of course, there are clauses that say you can never work in crypto (and) you can’t talk to anyone again,” he said.
“It was just a crazy and crazy administrative state that became really uncontrollable.”
The dry did not immediately respond to a request for comments.
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Since 1972, the SEC has included a “gap rule” in its regulations which prohibit defendants from criticizing the agency’s complaints – a clause that Commissioner Hester Peirce declared “compromises regulatory integrity”.
Krug said the only way the founders of Defi could comment on the colonies was that Congress asked them to testify. He added that there are “many founders who would like to talk about how the government really crazy them if the congress asked them to testify.”
Earlier this month, the Federal Deposit Insurance Corporation, regulating banks, published nearly 800 pages of “pause letters” said that it sent banks and financing companies to their crypto services.
The American Chamber and the Senate had audiences on the gambling of cryptography in early February who heard Crypto leaders on their scorching relations claimed to try to access the financial services by virtue of the Biden administration.
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Additional reports by Turner Wright.
