Custodia Bank CEO Caitlin Long has blasted regulators and lawmakers in Washington, D.C., for their “misleading crackdown” on the cryptocurrency sector and for ignoring her warnings of massive “scams” that now allegedly bankrupt entities.
in feb. 17 blog post titled “Shame on Washington, D.C. for firing messenger who warned of crypto disaster has long ripped government apart over its approach to regulating cryptocurrency, its failure to protect investors and alienating good actors in the space:
“Washington’s misleading campaign will only drive risks into the shadows, leaving regulators to play the knockout role as risks continually emerge in unexpected places.”
Long stressed that with her digital asset custodian, she “has been calling out the worst in crypto while trying to build a compliant legal alternative that moves scams to the trash heap. But […] Most policymakers today seem intent on killing innovators of high integrity.”
The CEO of Custodia Bank claimed her efforts to work with government agencies eventually faltered when she recounted her company’s recent spate of negative controversies.
Custodia was simultaneously attacked by the White House, the Federal Board of Governors, the Kansas City Federal Reserve, and Senator Dick Durbin (who conflated our non-leveraged, 100 percent liquid and solvent bank with FTX in a speech to the Senate). )” is, adding that:
“Custodia tried to become federally regulated — the very outcome that bipartisan policymakers claim to want. Yet Custodia was rejected and is now disparaged for daring to walk through the front door.”
Her sentiments echo figures like Coinbase CEO Brian Armstrong, who has suggested on multiple occasions that agencies such as the Securities and Exchange Commission (SEC) They reacted tepidly to his company’s efforts to maintain dialogue in good faith.
Earlier this month, Armstrong also criticized a lack of regulatory clarity in the US and what appears to be a “regulation by enforcement” approach in the wake of the SEC’s move to shut down Kraken’s staking services on February 3rd. 9.
“There is no doubt that regulators and lawmakers in Washington today are embarrassed that they failed to stop crypto criminals. DC Scalp Claims,” Long wrote in the blog post, adding:
“The calls for tough action today come from many of the same policy makers who have been bewitched by the fraudsters. In a 180-degree spin, they are now dumping the baby in the bathwater.”
Warnings not heeded
On Twitter, Long also noted that before many crypto companies went bust in 2022, she and several others had tried to warn Washington and “help law enforcement stop major scams,” but to no avail.
Related: SEC vs. Kraken: a one-time launch or a shooting attack on cryptocurrency?
Long revealed publicly for the first time that it had “turned over evidence to law enforcement of possible crimes” committed by an unnamed crypto company “months before that company collapsed and millions of customers were lost.”
1/ It’s time for me to reveal a few things. I just made a post titled “Shame on Washington, D.C. for shooting a messenger who warned him # encrypt Disaster.” Post link here: https://t.co/yTWWrEk3Os pic.twitter.com/rbo21DzOv3
– Caitlin Long ⚡️ (@CaitlinLong_) February 17, 2023
Kraken co-founder and CEO Jesse Powell responded to Long’s Twitter thread and corroborated her remarks by noting that: “I can’t tell you how infuriating it is when I point out huge red flags and clear illegal activity to regulators only to have them ignore cases for years.”
I can’t tell you how infuriating it is when I point out huge red flags and apparent illegal activity for regulators only to have them ignore cases for years. “They’re out there. It’s complicated. We look at everyone.” for years. Then to use them as an example. https://t.co/YHdNazM2UE
– Jessie Powell (@jespow) February 18, 2023