In response to the Biden administration’s intense scrutiny of the crypto industry, Custodia Bank, a prominent Wyoming-based financial institution that caters to crypto businesses, recently underwent a major restructuring.
like Reported Custodia Bank decided on Thursday to lay off nine of its 36 employees, in a move aimed at preserving capital amid growing legal battles with the Federal Reserve.
chokepoint 2.0 process
According to the report, the core of the current challenges facing Custodia Bank lies in its quest to obtain Main accounta gateway for state-chartered banks to access the Federal Reserve’s liquidity facilities and payment services.
Without this account, crypto-friendly banks like Custodia are forced to process transactions through intermediary institutions, incurring high costs in the process.
At the same time, regulators have warned traditional banks against affiliating with digital asset entities, citing concerns about the alleged risks posed by crypto industry prices. Volatility “And regulatory ambiguity at the federal level.”
Despite its modest size, Custodia Bank plays a major role in expanding banking services to businesses that have struggled to secure financial services elsewhere.
The bank attributes the recent layoffs to what it calls the federal government’s “Operation Chokepoint 2.0,” a concept that has gained traction in the crypto industry over the past few years.
This phrase reminds us of the Obama era.choke point process“This is emblematic of what Custodia sees as a concerted effort by the current administration to isolate the industry from the broader financial landscape.
Cryptocurrency Industry Faces Election Turmoil
Caitlin LongSandra Jordan, founder and CEO of Custodia Bank, expressed her feelings on the matter, emphasizing the detrimental impact of “Operation Choke Point 2.0” on the legal crypto sector in the United States.
Long stressed the bank’s commitment to adjusting the size of operations to overcome current challenges and protect resources until a resolution is reached in the ongoing legal battle or until the regulatory environment evolves positively.
While officials such as Deputy Treasury Secretary Wale Adeyemo have refuted allegations of a systematic campaign to exclude Digital Assets Sector From the financial mainstream, there have been cases where banks have cut ties with entities involved in cryptocurrencies. Custodia Bank itself revealed that two of its partner institutions ended cooperation due to their association with the bank.
These developments come against the backdrop of the November elections, which have major implications for the cryptocurrency industry. With former President Trump, known for his policies Bitcoin EmbracingAs the U.S. auto industry prepares to face Vice President Harris in the upcoming election, uncertainty looms over the industry’s future path.
Furthermore, the absence of definitive statements from Vice President Harris regarding her position on digital assets has left industry participants speculating about its potential impact on the administration’s policies regarding cryptocurrencies.
Featured image by DALL-E, chart by TradingView.com
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