Feb 19, 2023

Custodia Bank CEO Slams DC for Ignoring Warnings of Crypto Fraud

Caitlin Long, the CEO of Custodia Bank, has taken a strong stance against the regulators and lawmakers in Washington D.C. for their “misguided crackdown” on the crypto sector and ignoring her warnings of major “fraud” allegedly conducted by now-bankrupted entities.

In a Feb. 17 blog post titled, Shame On Washington, DC For Shooting A Messenger Who Warned of Crypto Debacle, Long lambasted the government for its approach to crypto regulation, failing to protect investors and alienating good actors in the space.

“Washington’s 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.” Long expressed.

Long has been advocating for the development of a lawful, compliant alternative to scams and frauds in the crypto space. She has been in contact with various government agencies in an effort to gain federal regulation, however, her attempts have been met with resistance.

“Custodia 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),” she said.

This sentiment has been echoed by others in the sector, such as Coinbase CEO Brian Armstrong. Armstrong has expressed his frustrations with the lack of regulatory clarity in the U.S. and the SEC’s “regulation by enforcement” approach.

Long made her grievances public on Twitter, claiming that well before the implosion of several crypto firms in 2022, she and many others had tried to warn Washington and “help law enforcement stop” major fraud, but to no avail. She also revealed that she had “handed over evidence to law enforcement of probable crimes” committed by an unnamed crypto firm “months before that company imploded and stuck its millions of customers with losses.”

Kraken co-founder and CEO Jesse Powell responded to Long’s Twitter thread and corroborated her statements by noting that: “I 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.”

The crypto sector has seen a surge in the adoption of Non-Fungible Tokens (NFTs) and other digital assets over the past year. As the industry continues to grow, it is becoming increasingly important that regulators and lawmakers provide clear guidance to ensure the safety of investors.

The Custodia Bank CEO has been advocating for a more comprehensive approach to crypto regulation that will protect investors while still allowing for innovation. She has urged regulators to take a more collaborative approach and to engage with the industry rather than simply attempting to shut it down.

As the industry continues to grow, it is becoming increasingly important for regulators and lawmakers to provide clear guidance to ensure the safety of investors. It is also important for crypto firms to engage in NFT marketing and promotion, as well as to work with a web3 agency or NFT marketing agency to ensure that their NFTs are reaching the right audiences. Selling NFTs is becoming an increasingly popular way to generate revenue, and it is important that firms are utilizing the right strategies to do so in a safe and compliant manner.

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