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Caitlin Lengthy, CEO of crypto financial institution Custodia, criticized the U.S. authorities for its dealing with of a large crypto fraud that occurred months earlier than the corporate’s collapse. She made her remarks in a weblog put up after disclosing proof to regulation enforcement. Lengthy’s put up adopted Custodia’s unsuccessful utility to grow to be a member of the Federal Reserve System, which was denied by the Federal Reserve Board.
CEO of Custodia Criticizes U.S. Authorities for ‘Capturing a Messenger Who Warned of Crypto Debacle’
Executives of digital foreign money and blockchain firms are displeased with the U.S. authorities’s crackdowns and lack of regulatory readability. Brian Armstrong, CEO of Coinbase, has called on Congress to go clear laws on cryptocurrencies, and Jesse Powell, CEO of Kraken, has echoed that message. On Feb. 17, Caitlin Long, CEO of Custodia, revealed a blog post explaining that she had given proof to authorities a few crypto fraud case months earlier than the corporate collapsed, leaving its hundreds of thousands of consumers with losses.
In her weblog put up titled “Disgrace on Washington, DC for Capturing a Messenger Who Warned of Crypto Debacle,” Lengthy argues that the present enforcement actions are a misguided crackdown on the complete trade. “Requires a crackdown in the present day are coming from most of the identical policymakers who had been charmed by the fraudsters,” Lengthy wrote. It’s well-known that senior members of the U.S. Securities and Alternate Fee (SEC), the White House, and the Commodity Futures Trading Commission (CFTC) met with Sam Bankman-Fried (SBF) and high-ranking FTX officers.
Moreover, an estimated one in three members of Congress received a direct contribution from SBF and his inside circle. “In a 180-degree flip, [policymakers are] now throwing the newborn out with the bathwater,” Lengthy wrote in her weblog put up. The Custodia CEO additionally talked about that authorities officers likened her crypto bank’s operation to FTX’s misconduct and collapse, leading to an ambush on the crypto trade by officers.
“Custodia Financial institution not too long ago discovered itself within the crosshairs of Beltway Politics at their worst,” Lengthy confused. “Custodia was concurrently attacked by the White Home, the Federal Reserve Board of Governors, the Kansas Metropolis Fed, and Senator Dick Durbin (who conflated our non-leveraged, 100-percent liquid and solvent financial institution with FTX in a Senate floor speech, by which he attacked two firms run by feminine CEOs — Constancy and Custodia — implicitly evaluating us to a 29-year-old accused fraudster who’s now sporting an ankle bracelet).”
The Custodia CEO added:
Custodia tried to grow to be federally regulated – the very consequence bipartisan policymakers declare to need. But Custodia has been denied and [is] now disparaged for daring to return by way of the entrance door.
After Lengthy revealed her weblog put up in regards to the state of affairs, Jesse Powell, CEO of Kraken, responded to her Twitter thread on the topic. “I can’t inform you how infuriating it’s to have identified huge pink flags and clearly criminal activity to regulators solely to have them ignore the problems for years,” Powell tweeted. “‘They’re offshore. It’s sophisticated. We’re taking a look at all people.’ FOR YEARS. Then for use as their instance.”
The complaints from Lengthy, Armstrong, and Powell come after the SEC’s enforcement motion in opposition to Terraform Labs and CEO Do Kwon, 9 months after the complete Terra ecosystem collapsed. The U.S. securities regulator was criticized for being late to the game, and lots of consider the SEC is just throwing spaghetti on the wall to see what’s going to stick.
What’s your opinion on the criticisms from Custodia’s CEO relating to the U.S. authorities’s dealing with of the current enforcement actions within the crypto trade and the pink flags she identified earlier than a crypto firm’s collapse? Share your ideas on this matter within the feedback part beneath.
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