Washington Turns Hostile on Crypto

A year ago, crypto successfully scraped and scrapped to get a foot in the door in Washington. But in the wake of crypto’s winter, and FTX’s spectacular collapse, that door has now slammed shut. Gaining legitimacy in Washington has been an essential part of the industry’s push into the mainstream. But a series of recent announcements from the Biden administration suggest there’s a crackdown ahead.

The vibes from the White House and federal agencies have been somber at best for anyone trying to run a cryptocurrency business. Over the last two weeks, government officials repeatedly gave crypto the cold shoulder. First, a crypto-friendly bank was firmly denied its request to join the Federal Reserve system. Custodia Bank, which believed it did everything by the book, was blindsided.
On a larger scale, the Fed’s rejection of Custodia was a major blow for an industry that’s always envisioned disrupting traditional finance. To do that, it needs direct access to the systems that underpin it, including the Fed’s payment network.