Custodia CEO Caitlin Long accused regulators and policymakers in Washington of having a misguided crackdown on the crypto industry.
Long, who provided law enforcement with evidence of a major crypto scam before the company eventually collapsed, said financial regulators’ approach to cryptocurrencies stifled good actors and failed to protect investors.
Hindering crypto growth with regulatory barriers
Custodia chief Caitlin Long explained the firm’s struggles to get approval for a master account from the US Federal Reserve and the Kansas City Fed. This will allow the company to become part of the Federal Reserve System. Long has sued the Federal Reserve over the denial of the application.
“Custodia sought to be federally regulated — the outcome bipartisan policymakers want. However, Custodia refused and is now belittled for daring to walk through the front door,” Long wrote in a blog post titled “Shame on Washington, DC for shooting a messenger who warned of crypto doom.”
Additionally, he criticized policymakers’ call for a crackdown on the crypto industry. In her view, this will only push risks into the shadows and leave regulators playing “game” as risks keep popping up in unexpected places.
Industry leaders rally behind Custodia CEO Caitlin Long’s criticism
Different executives from leading crypto companies share Long’s views. They believe that regulators have chosen enforcement over clarity, which has benefited no one since bad actors continue to operate.
Coinbase CEO Brian Armstrong and Kraken CEO Jesse Powell are among the prominent critics of US regulators. Armstrong criticized the US Securities and Exchange Commission’s failure to dialogue with the crypto exchange in good faith. Meanwhile, Powell noted that it was “outraging to point out huge 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 gray zone, where risks and bad actors will be harder to control.
Denial of responsibility
BeInCrypto has reached out to a company or individual involved in the story to get an official statement on the recent developments, but has yet to hear back.