The CEO and founder of Avanti Bank and Trust (the originator bank for the crypto industry), Caitlin Long, announced that the crackdown regarding the regulation of cryptocurrency had been initiated. She stated that the Federal Reserve of the United States would expectedly cause difficulties for the crypto community to get at the channels of USD payments.
On 13th July, the veteran of Wall Street expressed her opinions, in a long tweet, about the present regulatory scenario in the United States, anticipating that Ethereum (ETH) or Bitcoin (BTC) will not be directly targeted by the authorities rather some access points and intercessors, carrying the U.S. dollar to the crypto sector, will be utilized for the purpose. She explained that the operational processes of the banks would be the particular aim of the crackdown proceedings.
It has also been mentioned by her that the main process is marked to be commenced by 13th July as it is the deadline for the given period in which the implementation of Federal Reserve’s given guidelines about the access of payment system was expected. She added that the guidelines, to some extent, targeted the cryptocurrencies, although the asset class was not mentioned directly.
The system utilized by the central bank to check out the requests for entering the financial services of the agency was proposed by the guidelines issued on 5th May. The Proposal was a result of the significantly increasing demand for entering the payment system by the financial institutions and the fintech companies.
The necessity for ensuring the capability of the crypto firms, for gaining a direct entrance into the controlling accounts, was focused by Caitlin as she mentioned a 2017 instance when several banks closed many of the bank accounts which were related to crypto and it was not bothered whether their business was legitimate or based on fraud.
She highlighted that those risks are quite present today, and Coinbase (a prominent U.S. exchange) had figured out the same threats in the IPO prospectus.
It is worth noting, she stressed, that the lawful firms are allowed to acquire direct access to the U.S. dollar without any check and balance. An 18-page reflection letter has been submitted by Avanti (which was awarded a bank charter in the later phase of 2020) expressing its concerns about the legislation proposed by the Fed.