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Custodia Bank CEO slams Washington's 'misguided approach' to crypto

Published on

February 18, 2023
Read Time:3 Minute, 14 Second

Custodia Financial institution CEO Caitlin Lengthy has slammed regulators and lawmakers in Washington DC for his or her "misguided method" to the crypto sector and ignoring their warnings of significant "fraud" allegedly being perpetrated by now-bankrupt corporations.

In a February seventeenth to blog Publish titled Disgrace On Washington, DC For Capturing A Messenger Who Warning of Crypto Debacle, Lengthy slammed the federal government for its method to crypto regulation, failing to guard buyers and angering good actors within the area:

"Washington's misguided crackdown will solely eclipse the dangers, leaving regulators to play a slap on the mole as dangers maintain popping up in sudden locations."

Lengthy emphasised that along with her digital asset custody agency, she “cried out the worst of crypto whereas making an attempt to construct a reliable, compliant various that relegates fraud to the dustbin. However [...] Most of at present's policymakers appear decided to kill the high-integrity innovators.”

Custodia Financial institution's CEO claimed that her efforts to work with authorities businesses in the end thwarted when she recounted the spate of unfavorable clashes her agency has had not too long ago.

"Custodia was concurrently attacked by the White Home, the Federal Reserve Board of Governors, the Kansas Metropolis Fed and Senator Dick Durbin (who conflated our unleveraged, 100% liquid and solvent financial institution with FTX in a Senate speech)" stated her and added:

“Custodia has tried to turn out to be federally regulated — precisely the consequence bipartisan politicians need to faux. However Custodia was denied and is now being vilified for daring to come back by the entrance door.”

Their sentiments align with figures like Coinbase CEO Brian Armstrong, who has indicated on quite a few events that businesses just like the Securities and Alternate Fee (SEC) reacted frostily to his firm's efforts to engage in good dialogue.

Earlier this month, Armstrong also criticized the lack of regulatory clarity in the US and what appeared to be a “regulate by enforcement” approach following the SEC's move to shut down Kraken's staking services on February 9.

“Today's regulators and lawmakers in Washington are undoubtedly embarrassed that they failed to stop crypto criminals. DC calls for scalps," Long wrote in the blog post, adding:

“The demands for a crackdown today are coming from many of the same policymakers who were charmed by the scammers. In a 180 degree turn, they are now throwing the baby out with the bath water.”

Unheeded warnings

Over on Twitter, Long also hinted that long before the implosion of several crypto companies in 2022, Long had tried to warn Washington and help law enforcement stop large-scale fraud, but to no avail.

Related: SEC vs. Kraken: A one-off or opening salvo in an attack on crypto?

Long has publicly announced for the first time that she had "turned over to law enforcement evidence of probable crimes" committed by an unnamed crypto firm "months before that company imploded and inflicted losses on its millions of customers."

1/ IT'S TIME FOR ME TO DISCOVER SOME THINGS. I just published a post: “Shame on Washington, DC for shooting a messenger who was warned about #crypto Debacle." Hyperlink to submit is right here:https://t.co/yTWWrEk3Os pic.twitter.com/rbo21DzOv3

— Caitlin Lengthy ⚡️ (@CaitlinLong_) February 17, 2023

Jesse Powell, co-founder and CEO of Kraken, responded to Lengthy's Twitter thread, corroborating what she was saying by noting, "I can not let you know how upsetting it's to have regulators alerted to huge pink flags and blatant criminal activity, solely in order that they ignore the issues for years.”

I can not let you know how annoying it's to have the regulators mentioning huge pink flags and blatantly criminal activity, just for them to disregard the problems for years. "They're offshore. It is difficult. We're all one another." YEARS. Then function their instance. https://t.co/YHdNazM2UE

— Jesse Powell (@jespow) February 18, 2023



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Azeez Mustafa
Azeez began his FinTech career path in 2008 after growing interest and intrigue about market wizards and how they managed to become victorious on the battlefield of the financial world. After a decade of learning, reading and training the ins and outs of the industry, he’s now a sought after trading professional, technical/currency analyst and funds manager – as well as an author.
Last Updated : February 18, 2023
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