Caitlin Long, Erik Voorhees (Consensus 2023 LIVE)

According to Caitlin Long, CEO of Custodia Bank, the massive scams and failures across cryptocurrency in 2022 made regulators rash and reckless in driving the industry out.

The CEO met with private investor and ShapeShift CEO Erik Voorhees at Consensus 2023 to discuss the many ways cryptocurrency has lost its way, and how it can still help remedy problems caused by centralized mismanagement.

Does encryption stray from its purpose?

During Thursday’s session titled “Remember Why We Are Here: The Real Purpose of Crypto,” both Voorhees and Long said they were drawn to cryptocurrencies after being disillusioned with the Great Financial Crisis and learning about the failures of the current monetary system.

In particular, Long recognized that the current financial system did not operate on an “honest ledger”.

She explained, “If we have an honest ledger, the fruits of our labor can be preserved in such a way that no one else steals them.” Bitcoin, to her, represents a ledger that can be trusted and that “has no counterparty risk.”

Panelists reflected on the collapse of FTX in 2022 as a prime example of the highly centralized fraud from which Bitcoin was supposed to provide security. Long said the recent crackdown on crypto companies by regulators is an overreaction to this, with companies trying to be the most compliant with the toughest penalties.

“I regret that the United States is flushing away the whole reasonable regulation approach with the shower water, because they are literally pushing everything offshore and into unregulated shadow markets, rejecting those who are trying to create reasonable regulation.”

Long added that the SEC’s “wack-a-mole” approach to regulation will only allow people to continue to be scammed.

“It appears they are being deliberately said ‘stay away’… by those who approached them for permission,” she said.

Long’s Custodia Bank is designed to be a compatible bridge between cryptocurrency payments and the US dollar – lawsuit The Federal Reserve in June 2022 for improperly handling its decision to grant the company a master account with the central bank.

Open source is the answer

Voorhies believes there is a solution for scammers in the future — but he doesn’t need more regulation. “Open source software is the answer to the scams people commit,” he said, noting that Bitcoin’s natural transparent approach is simpler and more effective than government-mandated transparency.

“I wish some of these regulators would say thank you to these amazingly talented engineers around the world who are truly building transparent and immutable financial programs,” he said.

Libertarian-minded cryptocurrency fans don’t necessarily take issue with scammers, the speculative bubbles popping up in them. FTX, for example, while it was blowing up, is now a thing of the past.

“I don’t feel happy that people lost money on failed projects, but it also created things like Ethereum itself,” he said, referring to the 2017 ICO bubble. “The return on capital on Ethereum alone pays all ICO investments 10x — easily.”