The founder and CEO of the cryptocurrency bank Avanti, Caitlin Long, has rebutted the conclusions cited in the New York Times article on digital assets and the decentralized finance (DeFi) space.
1/ @NYTimes story on #crypto/#banking deserves a thoughtful reply. Issue isn’t black & white: anti-crypto forces try to paint us all w/ a broad brush. Bad actors deserve to be called out, but the article ignores fact that regulatory-compliant firms exist. https://t.co/IUYTctBGfV
— Caitlin Long 🔑 (@CaitlinLong_) September 5, 2021
The publication asserted that cryptocurrency and DeFi are “undermining the banking industry”, triggering concern among regulators and “some members of Congress.”
“This technology is moving so quickly and unpredictably that it is disrupting the world of financial services, regulators are lagging behind, and this could render consumers and financial markets vulnerable,” says the article.
The New York Times pointed to the crypto-lending platform BlockFi. In July the New Jersey Bureau of Securities barred the company from opening new BIAs (BlockFi Interest Account) for residents of the state, but ultimately moved the start of the restrictions to September 30.
Regulators Alabama, Texas and Vermont also levelled similar complaints against BlockFi.
The piece also recalled the hostility of American politicians toward cryptocurrencies. Earlier in an interview, Senator Elizabeth Warren “shadow banks”, focusing on the BlockFi case.
“Lawmakers and regulators are concerned that consumers do not always fully understand the potential risks of new crypto banking services and decentralized finance platforms. Deposits in cryptocurrency are not insured at the federal level,” writes New York Times.
According to Long, the piece contains a number of inaccuracies and omissions.
“Crypto opponents are trying to paint all of us with a broad brush. Bad actors deserve to be named, but the article ignores the existence of compliant firms,” wrote the CEO of Avanti.
In July, Warren urged U.S. Treasury Secretary Janet Yellen to lead the development of a strategy to reduce the growing risks that cryptocurrencies pose to the financial system.
Previously, Senator Elizabeth Warren called digital assets a “lousy investment” and said they facilitate illicit activity.
In August, in response to Warren’s request, Gary Gensler, head of the SEC noted that the agency needs additional powers to regulate cryptocurrencies.
In November 2020, the Wyoming Banking Board unanimously approved Avanti’s charter and business plan, granting it status as an officially chartered financial institution.
In the summer of 2021, Long criticised the Fed for its bias against crypto companies. In her view, denying them direct access to its payment rails creates the risk of cutting industry participants off from the banking system.
Later Avanti filed an application for membership as a participant bank in the Federal Reserve System.
Follow ForkLog news on Twitter!