Home News Crypto crackdown targeting USD access points has begun: Caitlin Long

Crypto crackdown targeting USD access points has begun: Caitlin Long

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Caitlin Long, CEO of crypto bank Avanti, fears that the US Federal Reserve may prohibit cryptocurrency firms from using banking services.

Regulators are increasingly tightening their oversight of the crypto industry. However, Caitlin Long believes that their actions are not aimed at regulating crypto assets, but at confronting them.

Long admits that you cannot know for sure how the situation will turn. But expresses confidence that it will not affect base-level networks such as Bitcoin or Ethereum.

The Avanti executive suggests that the authorities would prefer to take action against organizations acting as intermediaries between users and virtual asset service providers (VASP). We are talking about banks, financial institutions and payment systems. It is they who are the connecting link through which US dollars flow into the crypto space and back.

She added that on July 13, the period of discussion of the rules for access to payment systems, which were proposed by the FRS, ended. The leadership was a response to the growing number of fintech companies wanting to use the services of the central bank. This will be a defining moment in the further regulation of the industry. Despite the fact that cryptocurrencies were not directly mentioned in the Fed’s recommendations, Long said.

She believes that because of it there is a risk of repeating the situation in 2017. When crypto startups massively lost bank accounts. The risk of termination of services to the industry by banks also mentioned by the Coinbase exchange in its application for listing its securities.

Crypto industry needs deposit channels

The Avanti founder added that for many startups, having strong relationships with banks was “a deciding factor”. She also noted that the digital asset industry would be far less successful if organizations like Silvergate and Signature left the market.

Long pointed out that the crypto industry is growing rapidly – it needs a lot of deposit channels. It is important to this industry that law-abiding companies can directly access US dollars on their own. It’s not just about getting rid of tiered fees. It’s about deliberately maintaining our own banking access, independent of the whims of some faceless manager.

Long said one of the industry’s concerns now is the “forced separation” of banking and crypto services. This state of affairs poses risks for both industries.

In a commentary on the Fed’s proposal, Avanti detailed its position on these threats. In particular, the cryptobank noted that providing access to the payment system to crypto companies associated with lower risks. For example than allowing banks to work with digital assets.

Avanti believes the Fed can address threats by swiftly adopting guidelines and approving “qualified applicants”, including those from the cryptocurrency space.

Opposite opinion

However, billionaire and Bitmain co-founder Jihan Wu doesn’t think so. In his opinion, increased regulatory oversight could benefit the cryptocurrency industry. Regulation “weeds out attackers” and enhances the industry’s reputation in an environment of rapid growth, he said.

Recall that in May, the Chinese authorities banned companies from supporting cryptocurrency-related businesses, and then announced plans against cryptocurrency mining and Bitcoin trading. In June, the world’s largest crypto exchange, Binance, faced pressure from regulators.

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