Bank CEO calls out Washington's debanking “skullduggery”: Bitcoin Investor Week

Recent efforts to “debank” crypto firms successful the US revealed a “staggering” level of corruption among authorities officials, and the occupation is not yet resolved, 1 banking enforcement said successful a Feb. 27 interrogation during Bitcoin Investor Week. 

“The magnitude of skullduggery that is happening successful Washington D.C. is truly incredible… and it’s not implicit yet,” Caitlin Long, Custodia Bank’s laminitis and CEO, said during a sheet astatine the event.  

In 2023, the US Federal Reserve, which regulates banks, stymied Custodia’s efforts to work crypto firms by denying the slope entree to a maestro account, citing Custodia’s engagement successful “crypto-asset-related activities.” 

A maestro relationship would let the slope to custody assets straight with the cardinal slope and entree outgo rails for inter-bank transfers. Custodia took ineligible enactment against the Fed successful a bid to reverse the decision. 

Custodia Bank CEO Caitlin Long speaks astatine Bitcoin Investor Week. Source: Cointelegraph

Related: FDIC releases 790 pages of crypto-related letters successful regulatory pivot

Industry outrage implicit alleged debanking reached a crescendo erstwhile a June 2024 suit spearheaded by ​​Coinbase resulted successful the merchandise of letters showing US banking regulators asked definite fiscal institutions to “pause” crypto banking activities.

US President Donald Trump, who started his word connected Jan. 20, has criticized the anterior administration’s attack to crypto-friendly banks and vowed to amended integrate cryptocurrencies, including stablecoins, into the regulated fiscal system. 

In a Jan. 23 enforcement order, Trump told agencies to prioritize “fair and unfastened entree to banking services” for integer plus firms.

Stablecoin scrum

However, the conflict for regulatory clarity isn’t over, Long said. Instead, it has evolved into a multi-directional combat among antithetic types of stablecoin issuers seeking preferential rules, she said. 

There is an ongoing “scrum betwixt the large banks… and the incumbent stablecoin issuers, and past there’s Tether,” which is not based successful the US, Long said. 

The effect has been “this unthinkable travel of wealth that has gone from the banks and the crypto manufacture to radical successful [Washington] D.C., and they’re each going to fight,” Long said. 

“I don’t cognize however it’s going to travel out,” she added.

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