Custodia Bank CEO Criticizes US Crypto Crackdown

Caitlin Long's Criticism of US Regulators

Custodia Bank CEO Caitlin Long has strongly criticized American lawmakers and regulators for their aggressive stance on the cryptocurrency industry. Long claims she had previously alerted authorities about fraudulent activities within a major crypto firm, warnings that were allegedly ignored. This negligence, according to Long, has contributed to the current troubles facing the crypto sector.

Allegations of Ignored Warnings

Long disclosed that she had provided U.S. law enforcement with evidence of potential criminal activities at a crypto firm months before its collapse, which resulted in significant financial losses for many customers. She also warned banking regulators about a potential bank-run scenario affecting institutions that serve crypto firms, such as Silvergate Bank.

Retaliation Against Custodia Bank

Long alleges that her efforts to expose corruption and caution regulators led to punitive actions against Custodia Bank. The bank's application for federal regulation was rejected, and Long claims a coordinated campaign against her bank involved the White House, the Federal Reserve Board, and other influential entities.

Wider Impact and Industry Reaction

The crackdown on the cryptocurrency industry has affected other firms, including Kraken, which recently settled with the SEC for $30 million. Long's criticism resonates with industry figures who share her frustration over regulatory approaches that seem to overlook critical warnings and instead focus on penalizing whistleblowers.

Conclusion

Caitlin Long's experience highlights the tension between the burgeoning crypto industry and regulatory bodies. Her allegations of ignored warnings and subsequent retaliation underscore the challenges faced by crypto firms in navigating the regulatory landscape. The ongoing scrutiny and enforcement actions signal a contentious future for digital assets within the U.S. regulatory framework.