Caitlin Long’s Opposition to Vice President J.D. Vance
Caitlin Long, the CEO of Custodia Bank, has voiced strong opposition to Vice President J.D. Vance‘s assertion that “Operation Choke Point 2.0” is a thing of the past. During a recent interview, Long called into question Vance’s remarks made on May 28, describing them as a misrepresentation of the current state of financial regulation affecting the cryptocurrency sector.
Current State of Cryptocurrency Regulation
Long emphasized that despite some progress in the U.S. cryptocurrency landscape during the Trump administration, many of the Biden Administration’s federal debanking mechanisms remain operational. In her comments, she remarked,
“It’s not dead yet unfortunately because the tools that were used to target our industry are still in place.”
The term “Operation Choke Point 2.0” is a label adopted by many in the crypto community to describe a perceived effort by regulators under Biden to discourage banks from engaging with cryptocurrency businesses. This initiative reportedly involves actions from various federal agencies, including the SEC, the Federal Reserve, the FDIC, and the OCC, which have historically warned banks of the potential risks associated with cryptocurrency transactions.
Critics, particularly in the cryptocurrency sphere, have accused the SEC of deploying prolonged legal challenges against major crypto firms, blurring the lines between cryptocurrency regulations and securities laws.
Ongoing Challenges for Cryptocurrency Businesses
Despite recent developments where the Federal Reserve eased its guidance on banking institutions concerning cryptocurrency risks, Long asserts that several behind-the-scenes debanking mechanisms, such as informal supervision and increased exam scrutiny, persist. These unpublicized practices continue to hinder banks from effectively serving crypto companies.
According to Long, until these restrictive measures are dismantled entirely, the operation’s effects will endure. She also highlighted that many individuals linked to the original Operation Choke Point may still hold influential positions within financial regulatory agencies.
Criticism from Senator Cynthia Lummis
Earlier this year, Senator Cynthia Lummis, a supporter of cryptocurrency, criticized the Federal Reserve for rescinding its tough stance on banking crypto assets, arguing that such moves were mere “lip service”, given that the Fed still creates barriers for crypto-friendly banks in accessing vital accounts like master accounts. Long and Custodia Bank previously took legal action against the Federal Reserve for allegedly stalling their application for a master account for a staggering 19 months without resolution.
