Custodia Bank Cuts Jobs Amid Biden’s Crypto Crackdown, Will Trump Ease Regulations?

Laying off 25% of its workforce, Custodia Bank attributed the decision to Joe Biden’s crackdown on cryptocurrencies, accusing the Federal Reserve of regulatory abuse. The company, which employed nine people, faced significant challenges due to Federal Reserve regulations.

CEO Caitlin Long attributes the layoffs to the Biden administration’s stringent policies on virtual currencies, referring to it as “Operation Chokepoint 2.0. ” Trump seems to support the crypto industry as he campaigns for a less stringent approach to regulation.

Layoffs have been carried out by Custodia Bank, which has blamed it on certain financial challenges associated with Joe Biden’s admin’s approach to digital assets. The bank will downsize its employees by 25 percent, eliminating nine out of 36 employees due to challenges in its legal issues with the Federal Reserve due to a difficult regulatory landscape for cryptocurrencies.

Custodia Bank has laid off workers after the attempt to affect change failed due to Biden’s hostile approach toward crypto.

Custodia Bank Cuts Jobs Amid Biden’s Crypto Crackdown

Crypto friendly’s Custodia Bank has stated that it will dismiss nine employees, which is 25% of the bank’s workforce, as stated by Fox Business. This development comes in the wake of the GD bank being unable to obtain a master account from the Federal Reserve, which is very essential for any bank.

By using this account, the bank can conduct business directly, avoiding incidents that could raise operating costs. The terminations will assist the bank in preserving capital during the extended legal dispute with the Federal Reserve.

The bank justified the layoffs by citing Rex Mangus, the OCC’s media relations director, who stated that the Biden administration raised regulatory standards for the crypto industry. Custodia Bank’s CEO, Caitlin Long, mentioned the industry’s term “Operation Chokepoint 2. 0,” saying that the federal government is working to deny access to the banking system to crypto businesses.

Despite the recent dismissal, the crypto-friendly bank reassures that its operations will continue as normal, unaffected by the ongoing legal fight with the Federal Reserve.

This paper will analyze regulatory pressures shaping the business environment under the Biden administration.

Regulatory Pressures Under the Biden Administration

The Joe Biden admin has opted for stringent regulations for cryptocurrencies: federal agencies expanding control, including the Federal Reserve. Experts have advised traditional financial institutions to avoid crypto businesses due to risks and cryptocurrency-related issues.

The unfavourable climate has hindered crypto-related institutions like Custodia Bank from accessing essential banking services.

Deputy Treasury Secretary Wally Adeyemo denied reports of a widespread crypto sector attack. Some users experienced banking problems affecting their crypto investments, which caused job cuts at smaller institutions due to regulatory impacts.

Donald Trump’s Position on Crypto Regulations

While Custodia Bank and many other companies related to the crypto industry struggle with regulators, former U.S. President Donald Trump is already campaigning for the presidency promoting himself as a crypto-friendly candidate. Remember that Trump had previously advised against cryptocurrencies, but he has since changed his mind and endorsed the industry. He aims to lead the U.S. in crypto and lift industry restrictions if elected president.

Eric Trump, Trump’s son, leads World Liberty Financial in the crypto market, aiming to offer credit outside traditional finance. Tudor may launch DeFi loans, endorsed by Eric Trump as potentially transforming U.S. finance.

Donald Trump’s recent statements suggest his administration will be more crypto-friendly than Joe Biden’s current regime. This has prompted those who believe in cryptocurrencies and those against streamlined regulation from Trump’s side to heed his comments.