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Caitlin Long 🔑⚡️🟠 Profile picture
Caitlin Long 🔑⚡️🟠
@CaitlinLong_
Founder/CEO @CustodiaBank. #bitcoin since 2012. 22-yr Wall St veteran. Not advice; not views of Custodia Bank!
51 subscribers
Dec 1 • 12 tweets • 4 min read
1/ NEW FACTS REVEALED: 2 years ago today, the Fed quietly hammered 5 banks & thereby kicked off its industry-wide dragnet against banks serving the #crypto industry. @joerogan & @pmarca recently made discussions about #debanking go mainstream, which makes today’s anniv notable. 2/ On the Sunday after Thanksgiving 2022 (11/27/22), the Fed hit the first of these 5 banks w/ regulatory actions targeting their crypto activities, and its blitz carried into the following work week. Thus began what @nic__carter would later dub #OperationChokePoint2.0.
Nov 30 • 20 tweets • 4 min read
1/ HOW TO FIX THE U.S. DEBANKING PROBLEM, a 🧵by someone who set out to solve it but ended up repeatedly targeted by it (+ whose bank has a lawsuit against the Fed pertaining to it).

This is a #MeToo-type moment in banking, as stories are now pouring out.

How to fix it? 2/ As @pmarca alluded on @joerogan, the levers of power used/abused by federal bank regulators to effectuate #debanking are subtle & insidious. Multiple attempts have already been made to fix the problem. Why did they all fail? bc it's a multi-faceted problem that runs deep.
Sep 30 • 8 tweets • 2 min read
1/ CALLING OUT A DOUBLE STANDARD: I chewed on @CampbellJAustin's great🧵about selective enforcement against #crypto while protecting #tradfi, which prompted me to review the FTX fraud. Lo & behold, there seems to be ANOTHER pattern of selective enforcement 2/ The FDIC's Inspector General disclosed that 11 US banks "may have had involvement in alleged wire transfer fraud," & I tweeted the below screenshot of it on February 22, 2023:
Sep 22 • 7 tweets • 3 min read
1/ I'M STILL THINKING abt the bombshell Silvergate court filing. Here's the Warren crowd's #crypto bank scorecard:
❌Silvergate--suicided
❌Signature--suicided
❌Protego--OCC approval "expired"
〰️Paxos--ditto, but its non-bank is still going
✅ @custodiabank--survived & fighting 2/ Until the court filing, I didn't know the Fed "suicided" Silvergate by forcing it into an untenable choice👇: make #crypto <15% of its deposits (impossible in a short period of time) or throw in the towel. This touched off a bank panic the next day, costing the FDIC ~$40bn.🤦‍♀️ Image
Sep 22 • 8 tweets • 2 min read
1/ I DUG INTO the Fed's latest master account list, released last night. The big news is what's happening with OCC-chartered trust companies--2 new ones applied for Fed master accounts. This is noteworthy for several reasons, explained below. Data here: federalreserve.gov/paymentsystems… 2/ But first, among the ~430 Fed master account holders that are not FDIC insured (or equivalent), 11 are trust companies chartered by the OCC: Image
Sep 20 • 7 tweets • 2 min read
🚨 1/ BOMBSHELL REVELATION that Silvergate was liquid & solvent when the Fed forced it to close changes EVERYTHING when analyzing the March 2023 bank failures. Look at the dates:
* Mar 8: Silvergate voluntarily liquidates
* Mar 10: Silicon Valley fails
* Mar 12: Signature fails Image 2/ Stop & think about that timeline.

Think.

Would Silicon Valley Bank have failed had Silvergate not been forced by the Fed to close just 2 days earlier?

Recall the bank run at Silicon Valley really got started on Mar 9--the day after Silvergate announced it would liquidate.
May 16 • 7 tweets • 1 min read
DID I JUST SEE US GET SEN KELLY FROM AZ, @twobitidiot ??? 🙌 AND HICKENLOOPER OF CO!!!

Peeps—all these Dems are rejecting @ewarren & crossing the Biden White House. This is more than I’d expected. PEAK WARREN IS OVER!!!
Nov 24, 2023 • 14 tweets • 3 min read
QUIET PART OUT LOUD: they're rightly worried abt Hong Kong via USD stablecoins becoming a hub for USD clearing that's outside US's reach, while the US dithers. But it's not just HK. Obvious fast path for Milei to dollarize Argentina is via USD stablecoins.
ft.com/content/39f101… 2/ 👇But the US (under Sen Warren's control of the Biden Admin's financial svcs policy) is blocking everyone working on regulatory-compliant USD stablecoins, while letting big banks continue to build their own versions.😡 But the world already blew past the walled-garden versions Image
Aug 4, 2023 • 15 tweets • 4 min read
1/ OH BOY...#PrimeTrust's failure just took a BIG turn--its receiver today filed to put it into voluntary Chapter 11 (federal bankruptcy). I was afraid for Prime Trust customers of this very outcome & discussed why in the debate w/ @mikebelshe on @zGuz's podcast last month. Image 2/ In that debate, I laid out why banks as legal entities better protect customers than state-chartered trust companies in the event of failure--bc the federal bankruptcy process is designed to bring assets into the estate, while bank receivership is designed to protect customers
Jul 20, 2023 • 5 tweets • 2 min read
1/ 🚨ON THE DAY #FedNow is scheduled to launch, I noticed something...interesting, shall we say. 🤔Among the list of banks & credit unions in the Fed-authorized 1st group of participants is a #fintech--& it's a European fintech, not even an American one. So I went digging... Image 2/ But wait, you're thinking, how does a #fintech even have a Fed master account so it can qualify to clear US$ payments at the Fed--isn't the Fed keeping #fintechs out???

Yes, yes it is--except for certain fintechs. Europe lets its fintechs qualify for special bank charters. Image
Jul 1, 2023 • 8 tweets • 3 min read
1/ BIG NEWS for #fintech! A sixth US state--Idaho--is willing to charter uninsured, non-lending, 100% reserve banks that are eligible for Fed master accounts (the other states are CT, ME, NE, VT & WY). This trend could turn the "bank-as-a-service" (#BaaS) model on its head!!!!! 2/ The revelation was buried deep in the Fed's master account database (which Congress had to force the Fed to release--which it did late on a Friday afternoon before the Juneteenth 3-day weekend. Hoping no one would see it???) It's a #GiftThatKeepsGiving.
federalreserve.gov/paymentsystems…
Jun 29, 2023 • 13 tweets • 3 min read
TWEET 🧵on state-chartered trust companies, #PrimeTrust & whether customer funds are really theirs amid a failure. I responded to the below tweet from @mikebelshe but the thread was cut up, so I'm re-posting here in whole. First, Mike's tweet & then my 11-tweet response in whole: Mike's tweet here, asserting "it's the client's money" and "will you stop pushing the bullshit that WY is somehow special?"--@mikebelshe
Jun 27, 2023 • 6 tweets • 2 min read
1/ WOW--PRIME TRUST RECEIVERSHIP WILL BE A MESS & it's *EXACTLY* what the State of #Wyoming enacted its laws to avoid. Big ?s:
*who will pay the legal bills--NV taxpayers or #PrimeTrust customers??
*some PrimeTrust customers are IRAs/ERISA plans--can these even be bailed in?? 2/ Avoiding this situation is *EXACTLY* why #Wyoming set up special-purpose banks to service digital assets. Things Wyoming did but Nevada didn't:
*require SPDI banks to pre-fund receivership costs w/ regulatory capital
*clarified its UCC
*uses banks, not non-banks. Why? 👇
Apr 6, 2023 • 7 tweets • 2 min read
1/ THIS IS WHY Biden Admin's anti-#crypto strategy to push crypto into the shadows makes no sense: They want compliance w/ AML/CFT laws, but crypto is just code--so compliance can only be assured at the very connection points that they're actively choking.
home.treasury.gov/news/press-rel… 2/ It's *already* the case that the world's 8bn people can create & transact in US dollars w/ any permission or compliance screening--simply by downloading & running code on their smartphone. Given that reality, what's the optimal policy to maximize compliance w/ AML/CFT laws??🤔
Apr 6, 2023 • 6 tweets • 4 min read
5M views for @RobertKennedyJr’s anti-#CBDC tweet👇. #FedNow isn’t a CBDC but all the criticism from different corners is interesting.

A big issue w/ FedNow=banks don’t have enuf cash to handle the higher liquidity demands of 24/7/365 pymts. Banks need to hold *a lot* more cash! 2/ Yest, while on a podcast w/ @CathieDWood, I said out loud for the first time: #FedNow may not actually launch in July. Banks will need *a lot* more liquidity to handle 24/7/365 pymts, & to raise that cash they’d need to sell assets at loss—which wld reveal the solvency problem
Mar 28, 2023 • 13 tweets • 7 min read
1/ A 🧵ON THE @federalreserve's precedent-setting 86-page @custodiabank order, released on Friday. Custodia just published a blog post highlighting the newly-articulated Fed policies + the procedural abnormalities it reveals.
custodiabank.com/press/custodia… 2/ First, the policy items. Here are the first two:
Mar 11, 2023 • 7 tweets • 2 min read
1/ ANOTHER 🧵 ON A KEY QUESTION: astute thinkers are asking why community banks matter & how widespread this panic cld become. Dunno--but it *cld* spill over to big banks. One scenario: if FDIC depletes its insur fund, it borrows from US Treasury--which relies on primary dealers. 2/ Many people are saying big banks are safe bc they hedged the interest rate "gap risk" that is now plaguing community banks + they've had fewer deposit withdrawals. Yes, short-term. But here's the scenario:
Mar 11, 2023 • 14 tweets • 4 min read
1/ SVB—WHAT WENT WRONG
* mgmt: debauched its balance sheet
* depositors >$250k: thought their deposit at a fractional-reserve bank wasn’t an unsecured loan to a leveraged borrower (it is)
* Fed as regulator: that morning, the top cop said Fed-supervised banks don’t have bank runs 2/ * Fed FOMC: created the “gap risk” now kneecapping community banks (which met their bank capital rqmts by buying long-term bonds)
* bank risk managers: didn’t realize such gap risk (unhedged risk of a spike in interest rates) would morph into big liquidity risk amid a bank run
Mar 5, 2023 • 11 tweets • 6 min read
1/ I'VE BEEN THINKING abt #crypto & banking, which is in the news these days (& I'm living it too). I've spent yrs thinking abt the issues. Yes it *IS* possible for trad banks to safely bank #crytpo industry: simply back demand deposits 100% w/ cash held in a Fed master acct.💡 2/ But that's NOT what the US banks banking #crypto generally are doing. Pls see for yourselves by reviewing their financial statements--you'll see, eg, >10yr securities backing demand deposits that customers cld withdraw in minutes🤦‍♀️. That's a prob but isn't inherent to #crypto!
Feb 17, 2023 • 17 tweets • 5 min read
1/ IT'S TIME FOR ME TO REVEAL A FEW THINGS. I've just published a post "Shame On Washington, DC For Shooting A Messenger Who Warned Of #Crypto Debacle." Link to post is here:
caitlin-long.com/shame-on-washi… 2/ First, the revelations. Today, I’m publicly disclosing for the first time that (a) I handed over evidence to law enforcement of probable crimes committed by a big crypto fraud, starting months before that company imploded and stuck its millions of customers with losses, and...
Feb 16, 2023 • 22 tweets • 7 min read
1/ MY SUMMARY🧵re: today's SEC #Custody Rule proposal, which is here: sec.gov/rules/proposed…

*NONE OF THIS IS LEGAL ADVICE*

tl;dr--it doesn't kill #crypto custody; it's a move against state-chartered trust companies; there's one big issue, tho, which will trigger huge pushback 2/ THE BIG ISSUE (& I haven't seen anyone point this out yet)=the rqmt for custodians to indemnify for "negligence, recklessness or willful misconduct." All the banking, #WallSt, commodities & #crypto industries will push back together on this bc it could kill custody biz broadly