Biden Administration’s Regulatory Pressure Hits Custodia Bank

The Biden Administration’s Regulatory Pressure Takes a Toll on Custodia Bank

The Biden administration’s scrutiny and regulatory pressure have led to the termination of 9 out of 36 employees at Custodia Bank, a leading financial institution that caters to crypto-friendly businesses. The bank’s current situation coincides with its struggle to secure a master account with the Federal Reserve, which is essential for its business.

Custodia Bank, founded and led by Caitlin Long, has been instrumental in providing banking services to crypto businesses that often face challenges accessing traditional financial services. Its operations have been severely impacted by the current regulatory situation. The Biden administration’s approach to cryptocurrencies has faced increased scrutiny, with many in the industry labeling it “Operation Chokepoint 2.0“.

This term echoes the impact of “Operation Chokepoint” that was implemented by the Obama administration to combat illegal activities within the financial system, but which ended up inflicting harm on legitimate companies, including crypto-related businesses.

The crypto industry has been raising concerns about the consequences of this move, using Custodia Bank as an example. Custodia Bank has already lost two of its banking partners to regulatory pressure, indicating the difficulties faced by crypto-friendly financial institutions.

The crypto industry is also bracing itself for the impact of the November elections, which could be a turning point for digital assets in the US. Despite the fact that Vice President Harris’ position on digital assets remains uncertain, former President Trump, who has expressed support for Bitcoin, may run against him. This uncertainty has raised concerns among industry members and Custodia Bank CEO Caitlin Long about the potential impact of “Operation Choke Point 2.0” on the US crypto-focused industry.

Long has stressed the importance of clear regulations and a neutral environment for crypto firms. This sentiment is shared by many in the industry, who are advocating for broader regulation that differentiates legitimate businesses from illegal activities.

Want to learn more about the current regulatory landscape and its impact on the crypto industry? Check out this in-depth article on CoinSeeks.com: