Feb 19, 2023
“DC Slammed For Ignoring Crypto Fraud Warnings”
Custodia Bank CEO Caitlin Long has voiced her frustration with the lack of regulatory clarity and enforcement in the crypto sector. In a recent blog post, Long accused the government of Washington D.C. of shooting the messenger who warned of the crypto debacle.
In her post, Long criticized the government for its misguided crackdown on the crypto sector and for failing to protect investors. She argued that her digital asset custody firm, Custodia, has been trying to build a lawful, compliant alternative that would relegate scams to the trash heap. Despite her efforts, Long claimed that she has been attacked by the White House, the Federal Reserve Board of Governors, the Kansas City Fed, and Senator Dick Durbin.
Long also noted that Custodia has been denied regulatory approval and disparaged for daring to come through the front door. She argued that this approach will only push risks into the shadows and leave regulators playing whack-a-mole.
These sentiments were echoed by 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’s efforts to maintain a dialogue in good faith.
Long also took to Twitter to reveal that she had handed over evidence to law enforcement of probable crimes committed by an unnamed crypto firm months before it imploded and left its customers with losses. Kraken co-founder and CEO Jesse Powell corroborated Long’s statements, noting that it was infuriating to have pointed out massive red flags and obviously illegal activity to regulators only to have them ignore the issues for years.
The Custodia CEO concluded her blog post by stating that calls for a crackdown today are coming from many of the same policymakers who were charmed by the fraudsters. She argued that the government should focus on promoting NFTs and crypto marketing, as well as providing clarity and guidance on the legal and regulatory framework for selling NFTs.
Long believes that the government should be encouraging the development of a more robust web3 infrastructure, as well as providing support to NFT marketing agencies and web3 agencies. She also called for the establishment of a safe harbor for companies that are making good-faith efforts to comply with the law.
In the end, Long argued that the government should focus on fostering innovation and protecting investors, rather than shooting the messenger who warned of the crypto debacle.
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