Custodia CEO Slams US Government Over Broad Crackdown, Lack of Regulatory Clarity in Crypto Industry
Caitlin Long, CEO of crypto bank Custodia, criticized the US government for how it handled the massive crypto scam that took place in the months before the company collapsed. She made her remark in a blog post after revealing the evidence to law enforcement. Long’s post followed Custodia’s unsuccessful bid for Federal Reserve membership, which was rejected by the Federal Reserve Board.
Custodia CEO slams US government for ‘shooting down messenger that warned of crypto crash’
Digital currency and blockchain executives are unhappy with US government crackdown and lack of regulatory clarity. Brian Armstrong, CEO of Coinbase, called on Congress to pass clear legislation on cryptocurrencies, and Jesse Powell, CEO of Kraken, echoed the message. Feb 17 Caitlin LongCEO of Custodia, published Blog post explaining that she testified to authorities in a cryptocurrency scam case months before the company collapsed, leaving millions of its customers in jeopardy.
In a blog post titled “Shame on Washington DC for Shooting the Messenger That Warned of a Crypto Crash,” Long argues that the current enforcement action is a misguided crackdown on the entire industry. “Calls for crackdowns today come from many of the same politicians who were fascinated by the crooks,” Long wrote. It is well known that senior members of the US Securities and Exchange Commission (SEC), the White House and the Commodity Futures Trading Commission (CFTC) met with Sam Bankman-Freed (SBF) and senior FTX officials.
In addition, according to the estimates every third member The congress received direct input from the SBF and its inner circle. “Turn 180 degrees, [policymakers are] now throw the baby out with the bath water,” Long wrote on her blog. The Custodia CEO also mentioned that government officials have compared the performance of her crypto bank to misconduct and the collapse of FTX, leading to an ambush of officials in the crypto industry.
“Custodia Bank has recently been the focus of the ‘Ring Policy’ at its worst,” Long said. “Custodia came under simultaneous attack from the White House, the Federal Reserve Board of Governors, the Federal Reserve Bank of Kansas City and Senator Dick Durbin (who combined our 100 percent liquid and solvent unleveraged bank with FTX into Speech in the Senatein which he attacked two female-led companies – Fidelity and Custodia – implicitly comparing us to a 29-year-old accused fraudster who now wears an ankle bracelet).
Custodia CEO added:
Custodia has been trying to become federally regulated, just the kind of outcome that bipartisan politicians claim they want. However, the Custodia was denied, and [is] now humiliated for daring to enter through the front door.
After Long posted on her blog about the situation, Jessie Powell, CEO of Kraken, answered on her Twitter thread on the subject. “I can’t tell you how pissed I am when you pointed out so many red flags and clearly illegal activities to regulators only to have them ignore these issues for years,” Powell tweeted. “They are offshore. It’s Complicated. We are looking at everyone. FOR YEARS. Then to be used as an example.”
Long, Armstrong and Powell’s complaints come after the US Securities and Exchange Commission took action against Terraform Labs and CEO Do Kwon, nine months after the collapse of the entire Terra ecosystem. The US Securities Regulator was criticized for being late to the gameand many feel that the SEC is just throwing spaghetti at the wall to see what catches on.
What is your take on the Custodia CEO’s criticism of the US government’s handling of the recent enforcement measures in the crypto industry and the red flags she pointed out before the collapse of the crypto company? Share your thoughts on this topic in the comments section below.
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