Custodia CEO Caitlin Long has accused regulators and policymakers in Washington of having a misguided crackdown on the crypto industry.
Long, who gave evidence to law enforcement about a major crypto fraud before the company finally collapsed, has said that the financial regulators’ approach towards crypto stifled good actors and failed to protect investors.
Impeding Crypto Growth with Regulatory Hurdles
The head of Custodia, Caitlin Long, detailed the company’s struggles in getting approval for a master account from the US Federal Reserve and Kansas City Fed. This would enable the firm to become part of the Federal Reserve System. Long has sued the Federal Reserve for its rejection of the application.
“Custodia tried to become federally regulated – the result bipartisan policymakers claim to want. Yet Custodia has been denied and now disparaged for daring to come through the front door,” Long wrote in a blog post titled “Shame On Washington, DC For Shooting A Messenger Who Warned of Crypto Debacle.”
Additionally, she criticized the policymakers’ call for a crackdown on the crypto industry. In her view, this will only push risks into the shadows and leave regulators to play whack-a-mole as the risks continuously pop up in unexpected places.
Industry Leaders Rally Behind Custodia CEO Caitlin Long’s Criticism
Different executives of top crypto firms share Long’s views. They believe that the regulators have chosen enforcement over clarity, which has not benefited anyone since bad actors continue operating.
Coinbase CEO Brian Armstrong and Kraken’s CEO Jesse Powell are among the prominent critics of US regulators. Armstrong has criticized the US Securities and Exchange Commission’s failure to dialogue with the crypto exchange in good faith. Meanwhile, Powell noted that it was “infuriating to have pointed out massive red flags and illegal activity to regulators only to have them ignore the issues for years.”
As the crypto industry grows, regulators must balance protecting investors and allowing innovation to flourish. However, critics argue that the current approach will only stifle the industry’s growth and force it into a grey area, where risks and bad actors will be harder to control.
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