Prior to multiple companies going bankrupt, Caitlin Long disclosed that she had alerted federal officials to significant "fraud" in the cryptocurrency industry.
Caitlin Long, the CEO of Custodia Bank, has criticized Washington, D.C. legislators and authorities. criticizing their "misguided attack" on the cryptocurrency industry and disobeying her warnings of significant "fraud" allegedly carried out by now-bankrupted businesses.
A Feb. 17 blog post by Long, who slammed the government for its approach to cryptocurrency regulation, which failed to safeguard investors and alienated decent actors in the space:
“Washington’s misguided crackdown will only push risks into the shadows, leaving regulators to play whack-a-mole as the risks continuously pop up in unexpected places.”
The CEO highlighted the string of unpleasant encounters her company has recently had and stated that her attempts to cooperate with government organizations were finally flung back in her face.
“Custodia was simultaneously attacked by the White House, the Federal Reserve Board of Governors, the Kansas City Fed and Senator Dick Durbin (who conflated our non-leveraged, 100-percent liquid and solvent bank with FTX in a Senate floor speech).”
She said, adding that:
“Custodia tried to become federally regulated – the very result bipartisan policymakers claim to want. Yet Custodia has been denied and now disparaged for daring to come through the front door.”
She expresses views that are similar to those of individuals like Coinbase CEO Brian Armstrong, who has asserted on several occasions that organizations like the Securities and Exchange Commission (SEC) have responded coldly to his company's attempts to continue a dialogue in good faith.
After the SEC's decision to shut down Kraken's staking services on February 9, Armstrong also questioned the lack of regulatory clarity in the U.S. and what appears to be a "regulation by enforcement" strategy.
Regulators and policymakers in Washington today are undoubtedly ashamed of their inability to put an end to cryptocurrency crooks. Long stated in the blog post that DC is seeking scalps and added the following:
“Calls for a crackdown today are coming from many of the same policymakers who were charmed by the fraudsters. In a 180-degree turn, they’re now throwing the baby out with the bathwater.”
Long also claimed on Twitter that numerous people sought to warn Washington and "assist law enforcement halt" significant fraud before the collapse of multiple crypto corporations in 2022, but to no effect.
Long revealed in public for the first time that "months before the company crashed and left its millions of clients with losses," she gave evidence of likely crimes perpetrated by an unidentified crypto corporation to law authorities.
1/ IT'S TIME FOR ME TO REVEAL A FEW THINGS. I've just published a post "Shame On Washington, DC For Shooting A Messenger Who Warned Of #Crypto Debacle." Link to post is here:https://t.co/yTWWrEk3Os pic.twitter.com/rbo21DzOv3
— Caitlin Long 🔑⚡️🟠 (@CaitlinLong_) February 17, 2023
In a response to Long's Twitter thread, Kraken co-founder and CEO Jesse Powell backed up her claims, saying:
I can't tell you how infuriating it is to have pointed out massive red flags and obviously illegal activity to regulators only to have them ignore the issues for years. "They're offshore. It's complicated. We're looking at everybody." FOR YEARS. Then to be used as their example. https://t.co/YHdNazM2UE
— Jesse Powell (@jespow) February 18, 2023
