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Custodia Financial institution CEO slams Washington’s ‘misguided crackdown’ on crypto

by Jeremy
by Jeremy

The CEO of Custodia Financial institution Caitlin Lengthy has slammed regulators and lawmakers in Washington D.C. for his or her “misguided crackdown” on the crypto sector, and in addition for ignoring her warnings of main “fraud” allegedly carried out by now-bankrupted entities.

In a Feb. 17 weblog publish titled “Disgrace On Washington, DC For Capturing A Messenger Who Warned of Crypto Debacle,” Lengthy tore into the federal government for its method to crypto regulation, failing to guard traders and alienating good actors within the area:

“Washington’s misguided crackdown will solely push dangers into the shadows, leaving regulators to play whack-a-mole because the dangers repeatedly pop up in surprising locations.”

Lengthy careworn that along with her digital asset custody agency, she’s “been calling out the worst of crypto whereas attempting to construct a lawful, compliant various that relegates scams to the trash heap. However […] most of at the moment’s policymakers appear intent on killing the high-integrity innovators.”

The Custodia Financial institution CEO claimed that her efforts to work with authorities businesses had been in the end thrown again in her face, as she recounted the spate of destructive run-ins her agency has had of late. 

“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 non-leveraged, 100-percent liquid and solvent financial institution with FTX in a Senate ground speech),” she stated, including that:

“Custodia tried to turn out to be federally regulated – the very consequence bipartisan policymakers declare to need. But Custodia has been denied and now disparaged for daring to come back by way of the entrance door.”

Her sentiments echo that of figures comparable to Coinbase CEO Brian Armstrong, who has recommended on a number of events that the businesses such because the Securities and Alternate Fee (SEC) have reacted frostily to his agency’s efforts to take care of a dialogue in good religion.

Earlier this month, Armstrong additionally criticized the dearth of regulatory readability within the U.S. and what seems to be a “regulation by enforcement” method following the SEC’s transfer to close down Kraken’s staking providers on Feb. 9.

“In the present day’s regulators and lawmakers in Washington are little doubt embarrassed that they didn’t cease the criminals of crypto. DC is demanding scalps,” Lengthy wrote within the weblog publish, including that:

“Requires a crackdown at the moment are coming from lots of the similar policymakers who had been charmed by the fraudsters. In a 180-degree flip, they’re now throwing the child out with the bathwater.”

Unheeded warnings

Over on Twitter, Lengthy additionally recommended that nicely earlier than the implosion of a number of crypto companies in 2022, she and lots of others had tried to warn Washington and “assist regulation enforcement cease” main fraud, however to no avail.

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

Lengthy acknowledged that she was publicly disclosing for the primary time that she had “handed over proof to regulation enforcement of possible crimes” dedicated by an unnamed crypto agency “ months earlier than that firm imploded and caught its hundreds of thousands of shoppers with losses.”

Kraken co-founder and CEO Jesse Powell responded to Lengthy’s Twitter thread, and primarily corroborated her statements by noting that: “I can not inform you how infuriating it’s to have identified huge purple flags and clearly criminality to regulators solely to have them ignore the problems for years.”