Custodia Bank CEO Caitlin Long Calls for Broader Crypto Policy Shift as OCC Eases Rules, Custodia Bank Stock Rises 10%

Custodia Bank CEO Caitlin Long has asserted that the easing of crypto rules by the Office of the Comptroller of the Currency (OCC) does not signify the end of the US government's efforts to stifle the crypto industry, often referred to as Operation Choke Point 2.0. The OCC recently announced that US banks can now offer a range of crypto services, including custody and certain stablecoin activities. Acting Comptroller of the Currency Rodney E. Hood stated that this move aims to reduce the regulatory burden on banks and ensure consistent treatment of crypto-related activities.

However, Long believes that Operation Choke Point 2.0 will persist until the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) also rescind their restrictive policies on digital assets. Last December, a Freedom of Information Act (FOIA) request by the crypto exchange Coinbase revealed numerous instances where the FDIC pressured banks to freeze crypto-related services. Long also called for the Fed to grant Custodia Bank a master account, which would allow the digital asset custody bank to hold an account directly with the Federal Reserve.

Long emphasized that the OCC's move, while positive, does not address the broader regulatory challenges faced by the crypto industry. She noted that banks that wanted to serve crypto companies but faced regulatory pressure were primarily those regulated by the Fed and FDIC, not the OCC. The House Committee on Oversight and Government Reform has requested access to unredacted documents from the FDIC to investigate allegations of deliberate de-banking of the crypto industry, but the FDIC has not formally responded to this request.

Despite the OCC's regulatory easing, the broader battle for crypto-friendly banking policies continues. Long's comments highlight the need for a more comprehensive regulatory shift to fully unlock banking services for crypto companies. The OCC's new guidance permits national banks and federal savings associations to engage in crypto custody, stablecoin-related activities, and participation in distributed ledger networks. However, Long stressed that Operation Choke Point 2.0 will not be over until the Federal Reserve and FDIC also rescind their restrictive policies against crypto businesses.

The debanking of crypto firms has been a contentious issue, with industry advocates calling for greater clarity and fairness in how financial institutions interact with digital asset companies. The OCC's decision sends a strong signal that the regulatory environment may be shifting in favor of greater financial inclusion for crypto