Crypto Lawyer Criticizes US Regulators Over Anti-Crypto Bias
Crypto Lawyer Criticizes US Regulators
A prominent crypto lawyer has recently criticized US regulatory authorities, accusing them of promoting an anti-crypto agenda. The lawyer expressed frustration over what he perceives as a false narrative being advanced by these regulators, labeling them as protective of traditional financial incumbents.
Silvergate Bank's Insolvency and Crypto Volatility
The insolvency of Silvergate Bank has sparked debate, with Senator Sherrod Brown attributing the bank's financial troubles to the volatile nature of cryptocurrencies. He suggested that Silvergate's reliance on the risky crypto sector contributed significantly to its downfall.
Counterarguments to Anti-Crypto Claims
In response, the crypto lawyer argued that the real issue was mismanagement of user deposits rather than crypto volatility. He emphasized the importance of presenting factual information to counter the negative portrayals of the crypto industry.
Insights from CustodiaBank CEO
Caitlin Long, CEO of CustodiaBank, supported the lawyer's stance by providing details on Silvergate's financial practices. She highlighted a significant mismatch between demand deposits and available cash, dismissing the notion that crypto was to blame for the bank's insolvency. According to Long, if Silvergate had maintained adequate cash reserves, the bank run would not have jeopardized its capital.
Impact of Silvergate's Financial Troubles
Silvergate's financial woes were compounded by its connection to the bankrupt FTX crypto exchange, leading to a sharp decline in its share price. In response, the USDC stablecoin issuer moved its remaining reserve deposits to other banking partners, distancing itself from the troubled bank.
This ongoing clash between crypto advocates and US regulators highlights the broader tension surrounding cryptocurrency regulation and its impact on financial institutions.
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