HomeNewsXRP Advocate John Deaton Targets Federal 'Corruption', Seeks Regulatory Reform

XRP Advocate John Deaton Targets Federal ‘Corruption’, Seeks Regulatory Reform

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  • John E. Deaton criticizes federal agency corruption, advocates for a five-year ban on regulatory ‘revolving door’ practices.
  • Caitlin Long voices concerns over Fed’s inconsistent approvals after Custodia Bank’s master account application is denied.

John E. Deaton, a lawyer supporting XRP and a Senate candidate in Massachusetts, has publicly criticized what he describes as widespread corruption within U.S. federal agencies, including the Federal Reserve.

Deaton, who represented 75,000 XRP holders in the Ripple vs. SEC case, expressed these views on the social media platform X, labeling the current period as “THE CORRUPTION ERA.”

Deaton is concerned about the “revolving door” practice, where federal regulators leave their posts to take high-level positions within industries they previously regulated. He advocates for legislation to impose a five-year ban on such career transitions, aiming to curb conflicts of interest and influence within government agencies.

The discussion gained further momentum following remarks by Caitlin Long, the CEO of Custodia Bank, who shared her concerns on the social media platform X. Long’s objections came after the Federal Reserve rejected Custodia Bank’s application for a master account, yet granted approval to a comparable application from Numisma, a fintech bank based in Connecticut without FDIC insurance or federal oversight.

The decision came soon after a federal judge turned down Custodia Bank’s application, and shortly after the halt of an investigation by the Inspector General into the Federal Reserve’s procedures for handling master accounts.

Long questioned the consistency and fairness of the Federal Reserve’s decisions, noting that a bank with a regulatory profile similar to Custodia’s had been approved under questionable circumstances, involving a former Federal Reserve governor.

Eleanor Terrett, a journalist at FOX Business, noted that Numisma, previously called Currency Reserve, was conditionally approved by the Federal Reserve to obtain a master account. This marks it as one of the rare instances where a bank not covered by FDIC insurance and not federally regulated has received such approval in recent times. 

The approval of both this bank and another, each connected to ex-Federal Reserve officials, has prompted questions regarding the fairness of the Federal Reserve’s approval practices.

The refusal to grant Custodia Bank a master account poses a barrier to the cryptocurrency industry, which views such access as essential for more effective integration into the U.S. financial system. 

Access to a Federal Reserve master account would enable crypto-focused banks to offer more streamlined and potentially cheaper banking services by directly connecting to the Federal Reserve’s payment systems.

These events have contributed to concerns about an initiative some refer to as “Operation Choke Point 2.0,” allegedly an effort by the current administration to restrict the cryptocurrency sector, illustrating ongoing regulatory challenges that impact the adoption of new financial technologies.

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Isai Alexei
Isai Alexei
As a content creator, Isai Alexei holds a degree in Marketing, providing a solid foundation for the exploration of technology and finance. Isai's journey into the crypto space began during academic years, where the transformative potential of blockchain technology was initially grasped. Intrigued, Isai delved deeper, ultimately making the inaugural cryptocurrency investment in Bitcoin. Witnessing the evolution of the crypto landscape has been both exciting and educational. Ethereum, with its smart contract capabilities, stands out as Isai's favorite, reflecting a genuine enthusiasm for cutting-edge web3 technologies. Business Email: info@ethnews.com Phone: +49 160 92211628