Custodia CEO slams US government for sweeping crackdowns and lack of regulatory clarity in crypto industry – Regulation
Caitlin Long, CEO of crypto bank Custodia, criticized the US government for its handling of a massive crypto scam that took place months before the company collapsed. She made her remarks in a blog post after disclosing evidence to law enforcement. Long’s post followed Custodia’s unsuccessful application to become a member of the Federal Reserve System, which was rejected by the Federal Reserve Board.
Custodia CEO Slams US Govt for ‘Shooting Messenger Who Warned of Crypto Debacle’
Executives of digital currency and Blockchain-Companies are dissatisfied with the US government’s actions and the lack of regulatory clarity. Coinbase CEO Brian Armstrong has urged Congress to pass clear legislation cryptocurrencies goodbye, and Kraken CEO Jesse Powell reiterated that message. On February 17th Caitlin LangCEO of Custodia, published a blog post explaining that months before the company collapsed, she had provided authorities with evidence of a crypto scam, causing losses to millions of customers.
In her blog post titled “Shame on Washington, DC for Shooting a Messenger Who Warning of Crypto Debacle,” Long argues that the current enforcement actions are a misguided crackdown on the entire industry. “The demands for a crackdown today are coming from many of the same policymakers who were charmed by the scammers,” Long wrote. It is well known that senior members of the US Securities and Exchange Commission (SEC), the White House and Commodity Futures Trading Commission (CFTC) with Sam Bankman-Fried (SBF) and senior FTX officials.
Additionally, an estimated one in three Congress members received direct input from SBF and his inner circle. “In a 180 degree turn [policymakers are] now throw the baby out with the bath water,” Long wrote in her blog post. The CEO of Custodia also mentioned that government officials compared the operation of their crypto bank to FTX’s misconduct and collapse, leading to an ambush of the crypto industry by officials.
“Custodia Bank recently found itself in the crosshairs of Beltway policy at its worst,” Long said. “Custodia was simultaneously attacked by the White House, the Federal Reserve Board of Governors, the Kansas City Fed, and Senator Dick Durbin (who conflated our unleveraged, 100 percent liquid and solvent bank with FTX in a Senate speech, where he used two of companies run by female CEOs – Fidelity and Custodia – and implicitly compared us to a 29-year-old accused fraudster who now wears an ankle bracelet).
Custodia’s CEO added:
Custodia attempted to become federally regulated – the very result that bipartisan politicians profess to want. Yet custodia was denied and [is] now vilified for daring to come in the front door.
After Long published her blog post about the situation, Kraken CEO Jesse Powell said, answered to her Twitter thread on the subject. “I can’t tell you how upsetting it is to have alerted regulators to massive red flags and blatant illegal activity, only for them to ignore the issues for years,” Powell tweeted. “‘They are offshore. It’s complicated. We look at each other.’ YEARS. Then serve as their example.”
Long, Armstrong and Powell’s complaints come after SEC enforcement actions against Terraform Labs and CEO Do Kwon, nine months after the entire Terra ecosystem collapsed. The US Securities and Exchange Commission was criticized for being late to the gameand many believe the SEC is simply throwing spaghetti at the wall to see what sticks.
What do you think of the Custodia CEO’s criticism of the US government’s handling of recent enforcement actions in the crypto industry and the red flags it pointed out prior to the collapse of a crypto company? Do share your thoughts on this topic in the comments section below.
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Source: Crypto News Deutsch
