Caitlin Long, the founder and CEO of Custodia Bank, in a Twitter thread on Feb. 17, revealed that she handed over evidence to law enforcement agencies in the United States of probable crimes committed by a big crypto firm and even warned regulators of the risks banks expressly serving the crypto industry were facing.
Fighting corruption in crypto is not a partisan issue
Custodia Bank, which specializes in crypto asset payment while also offering custody services for commercial clients in the United States, is based in Wyoming. They have been engaged in the industry since it launched in 2020, with Caitlin as the CEO.
With insider information and evidence of what big crypto firms were doing, breaking the law, and inconveniencing millions of customers who still can’t access their funds, Caitlin claimed she came out to reveal the rot even before the bank run and liquidity crisis of the end of last year started.
Specifically, the founder seems to point out corruption at the policy-making level. She believes stamping corruption out of crypto is not a partisan issue. Instead, she assesses that the only way crypto can be corruption and fraud-free is not to engage in politics and instead let the law adapt and take its course.
She appears to blame politics for Custodia Bank being denied the required licenses for the institution to be federally regulated. The Federal Reserve Board, in a statement in late January 2023, said Custodia Bank’s “novel business model and proposed focus on crypto-assets presented significant safety and soundness risks.”
Cryptocurrencies are here to stay despite the crackdown
While regulators and agencies across the world are trying to intervene and protect investors as mandated by the law, Caitlin says cryptocurrencies won’t be “uninvented” and will continue to exist as “internet-native” money even if there is opposition.
Moreover, because the technology only requires users to have an internet connection and run a code, over time, cryptocurrencies will steadily replace banks in remittance, allowing users to send money peer-to-peer.
“This tech will steadily disintermediate banks because anyone with an internet connection can run the code and use US dollars without banks. DC’s misguided crackdown will only push risks into shadows, leaving regulators to play whack-a-mole as risks continuously pop up in unexpected places.”
The United States Securities and Exchange Commission (SEC) has been cracking down on crypto firms. This week, they issued a Wells notice to Paxos. On Feb. 17, the SEC said it was suing Do Kwon, the founder behind the collapsed UST algorithmic stablecoin.