Custodia Bank Cuts Jobs Amid Biden’s Crypto Crackdown, Will Trump Ease Regulations?
Custodia Bank has announced layoffs due to financial pressures linked to the Joe Biden’s admin regulatory stance on digital assets. The bank will reduce its workforce by 25%, cutting nine positions out of 36, as it faces challenges in its legal battle with the Federal Reserve amid tough crypto regulations.
Custodia Bank Cuts Jobs Amid Biden’s Crypto Crackdown
According to Fox Business, Custodia Bank, a crypto-friendly bank, has announced the layoff of nine employees, representing 25% of its workforce. The bank’s decision comes as it struggles to secure a master account from the Federal Reserve, which is crucial for its operations.
Without this account, the bank is forced to conduct business through other institutions, leading to increased costs. The layoffs are part of the bank’s efforts to preserve capital as it continues its legal fight against the Federal Reserve.
The bank has attributed the need for these layoffs to the Biden administration’s intensified regulatory scrutiny on the crypto industry. Custodia Bank’s CEO, Caitlin Long, has pointed to what the industry has dubbed “Operation Chokepoint 2.0,” which she claims is a coordinated effort by the federal government to cut off crypto businesses from the traditional banking system. Despite the layoffs, the crypto-friendly bank has stated that its operations will continue as normal, and the recent developments will not impact its ongoing lawsuit against the Federal Reserve.
Regulatory Pressures Under the Biden Administration
The Joe Biden admin has taken a stringent approach to crypto regulations, with federal agencies, including the Federal Reserve, increasing oversight. Traditional banks have been cautioned against doing business with crypto firms, citing the volatility and regulatory uncertainties associated with digital assets.
Consequently, this has led to a challenging environment for crypto-focused institutions like Custodia Bank, which have found it increasingly difficult to access essential banking services.
Deputy Treasury Secretary Wally Adeyemo recently denied that there is a coordinated effort to undermine the crypto industry. However, reports suggest otherwise, with some claiming that their bank accounts have been terminated due to their involvement in crypto. This regulatory environment has as a result impacted smaller institutions, forcing them to take drastic measures such as layoffs to stay afloat.
Donald Trump’s Position on Crypto Regulations
As Custodia Bank and other crypto-related businesses face regulatory challenges, former President Donald Trump has positioned himself as a pro-crypto candidate in the upcoming presidential election. Trump, who once criticized cryptocurrencies, has since become an advocate for the industry. He has promised to make the U.S. a leader in cryptocurrency and has hinted at easing regulations if elected.
Moreover, Trump’s son, Eric Trump, has made moves in the crypto space, leading the development of a new project called World Liberty Financial. This initiative aims to provide financial services outside the traditional banking system, potentially offering loans based on decentralized finance (DeFi) principles. Eric Trump has expressed his enthusiasm for the project, suggesting that it could revolutionize access to financial services in the U.S.
Consequently, Donald Trump’s recent statements suggest that his administration would adopt a more favorable stance toward the crypto industry, in stark contrast to the current regulatory approach under the Joe Biden admin. This has sparked interest among crypto enthusiasts, who see Trump as a potential ally in their fight against stringent regulations.
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