The founder and CEO of the first bank to invest in the crypto sector, Caitlin Long, declared that the regulatory crackdown on cryptocurrency has started. The Avanti Bank & Trust founder predicted in a long July 13 tweet that authorities will not target Ethereum and Bitcoin. Instead, they will aim for the ‘access points’ and ‘intermediaries’ for the US dollars into the nascent sector.
The Wall Street veteran also highlighted her opinions on the current regulatory situation in the United States:
“The issue isn’t Bitcoin, Ethereum, or other crypto protocols, they’re just fine. The risk comes from the banks’ operational processes.”
She expects the US Federal Reserve to make it highly challenging for the crypto firms to access USD payment channels. Moreover, she said that July 13 marked the ‘important event’ where the comment period for the Federal Reserve’s proposed payment system access guidelines ended, insisting that the Fed’s guidelines were mainly targeting cryptos despite not mentioning the asset class outrightly.
1/ THREAD ABT REGULATORY NEWS in #crypto, which I’ve been chronicling on twitter since April. Seems crackdown has begun. I dunno how it'll turn out but:
* it won't impact #BTC #ETH etc directly. Base layers will keep addin' blocks
* it'll impact intermediaries & US$ access points
— Caitlin Long 🔑 (@CaitlinLong_) July 13, 2021
These guidelines were proposed on May 5 and they outline the system that the central bank plans to use to evaluate requests to access the agency’s financial services. This proposal comes amid increasing requests from fintech companies and financial institutions and providers to get some form of access to the payments system.
Long insisted on the importance of guaranteeing that crypto firms can gain direct access to master accounts with the Federal Reserve, citing an example from 2017 where several banks conducted mass closures of bank accounts linked to crypto, saying:
“Didn’t matter whether biz was legit or scam–all were de-banked.”
According to Long, these same risks are still existing today. She said that Coinbase, a leading US exchange, had expressed the same worries in its IPO prospectus. She mentioned:
“It’s important for our industry that law-abiding companies can gain direct US$ access on our own. It’s not just about cutting out layers of fees that many in our industry are incurring just to get US$ access.”
Avanti received a bank charter in Wyoming in October 2021. It has since submitted an 18-page comment letter insisting on its issues with theFed’s proposed legislation. Long is the co-founder of the Wyoming Blockchain Coalition that launched in 2017. She was integral in establishing Wyoming’s permissive regulatory apparatus concerning crypto companies.