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The CEO of Custodia Bank, Caitlin Long, has slammed regulators and lawmakers in Washington D.C. for their \u201cmisguided crackdown\u201d on the crypto sector and ignoring her warnings of major \u201cfraud\u201d allegedly conducted by now-bankrupted entities.<\/p>\n
In a Feb. 17 blog post titled, Shame On Washington, DC For Shooting A Messenger Who Warned of Crypto Debacle, Long tore into the government for its approach to crypto regulation, failing to protect investors and alienating good actors in the space: <\/p>\n
\u201cWashington\u2019s misguided crackdown will only push risks into the shadows, leaving regulators to play whack-a-mole as the risks continuously pop up in unexpected places.\u201d<\/p><\/blockquote>\n
Long stressed that with her digital asset custody firm, she\u2019s \u201cbeen calling out the worst of crypto while trying to build a lawful, compliant alternative that relegates scams to the trash heap. But […] most of today\u2019s policymakers seem intent on killing the high-integrity innovators.\u201d <\/p>\n
The Custodia Bank CEO claimed that her efforts to work with government agencies were ultimately thrown back in her face as she recounted the spate of negative run-ins her firm has had of late.\u00a0 <\/p>\n
\u201cCustodia was simultaneously attacked by the White House, the Federal Reserve Board of Governors, the Kansas City Fed and Senator Dick Durbin (who conflated our non-leveraged, 100-percent liquid and solvent bank with FTX in a Senate floor speech),\u201d she said, adding that:<\/p>\n
\u201cCustodia tried to become federally regulated \u2013 the very result bipartisan policymakers claim to want. Yet Custodia has been denied and now disparaged for daring to come through the front door.\u201d<\/p><\/blockquote>\n
Her sentiments echo that of figures such as Coinbase CEO Brian Armstrong, who has suggested on multiple occasions that agencies like the Securities and Exchange Commission (SEC) have reacted frostily to his firm\u2019s efforts to maintain a dialogue in good faith. <\/p>\n
Earlier this month, Armstrong also criticized the lack of regulatory clarity in the U.S. and what appears to be a \u201cregulation by enforcement\u201d approach following the SEC\u2019s move to shut down Kraken\u2019s staking services on Feb. 9. <\/p>\n
\u201cToday\u2019s regulators and lawmakers in Washington are no doubt embarrassed that they failed to stop the criminals of crypto. DC is demanding scalps,\u201d Long wrote in the blog post, adding that: <\/p>\n
\u201cCalls for a crackdown today are coming from many of the same policymakers who were charmed by the fraudsters. In a 180-degree turn, they\u2019re now throwing the baby out with the bathwater.\u201d<\/p><\/blockquote>\n
Unheeded warnings<\/h3>\n
Over on Twitter, Long also suggested that well before the implosion of several crypto firms in 2022, she and many others had tried to warn Washington and \u201chelp law enforcement stop\u201d major fraud, but to no avail. <\/p>\n
Related: <\/em><\/strong>SEC vs. Kraken: A one-off or opening salvo in an assault on crypto?<\/em><\/strong><\/p>\n
Long publicly disclosed for the first time that she had \u201chanded over evidence to law enforcement of probable crimes\u201d committed by an unnamed crypto firm “months before that company imploded and stuck its millions of customers with losses.\u201d<\/p>\n
\n1\/ IT’S TIME FOR ME TO REVEAL A FEW THINGS. I’ve just published a post “Shame On Washington, DC For Shooting A Messenger Who Warned Of #Crypto<\/a> Debacle.” Link to post is here:https:\/\/t.co\/yTWWrEk3Os pic.twitter.com\/rbo21DzOv3<\/a><\/p>\n
\u2014 Caitlin Long \u26a1\ufe0f (@CaitlinLong_) February 17, 2023<\/a><\/p><\/blockquote>\n
Kraken co-founder and CEO Jesse Powell responded to Long\u2019s Twitter thread and corroborated her statements by noting that: \u201cI can\u2019t tell you how infuriating it is to have pointed out massive red flags and obviously illegal activity to regulators only to have them ignore the issues for years.\u201d<\/p>\n
\nI can’t tell you how infuriating it is to have pointed out massive red flags and obviously illegal activity to regulators only to have them ignore the issues for years. “They’re offshore. It’s complicated. We’re looking at everybody.” FOR YEARS. Then to be used as their example. https:\/\/t.co\/YHdNazM2UE<\/p>\n
\u2014 Jesse Powell (@jespow) February 18, 2023<\/a><\/p><\/blockquote>\n<\/div>\n