At 1843 Capital, a central tenet of our investment philosophy is investing in strong teams that have both domain expertise and integrity to effectively disrupt or create large markets, which is why we chose to invest in Caitlin Long and her team at Custodia Bank.
“A fool and their leveraged Bitcoin are soon parted.”
Caitlin Long, CEO Custodia Bank June 2021
Custodia Bank is a US dollar-and-digital-asset bank (“dada-bank”), chartered to provide a compliant bridge between the US dollar and digital asset financial systems. Custodia is committed to being “full reserve” or backing each digital asset 1:1 with USDs. This is ultimately a commitment to solvency, to laying the appropriate foundation for digital banking.
Caitlin Long, CEO and Founder, put in the hard work to build Custodia correctly and methodically in line with regulatory bodies. She’s a 22-year Wall Street veteran who has been active in bitcoin and blockchain since 2012. She jointly spearheaded a blockchain project for delivering market index data to Vanguard as chairman and president of Symbiont, an enterprise blockchain start-up. Finally, showing leadership in the sector, she led the charge to make her native state of Wyoming an oasis for blockchain companies in the US, where she helped Wyoming enact 20 blockchain-enabling laws.
Through its programmable dollar, “Avit,” Custodia backs the digital assets it holds with US dollars, providing the accounting, legal and tax structure required by RIAs and institutional investors. Custodia offers the legal and regulatory clarity for digital assets, including strong investor protections, and institutional-quality digital asset custody services.
As the SBF/FTX saga unfolds, we are resharing this meetup in June of 2021 at Bitcoin Miami between Caitlin and Sam Bankman-Fried. In this panel, Caitlin decries the use of any leverage of bitcoin beyond 1:1 and Sam claims that leverage was key to the growth in the crypto market.
Caitlin: “Satoshi didn’t create anything that was designed to be leveraged… and the excesses that we are seeing in this bull market are coming from a lot of leverage that didn’t happen in the previous bull market.”
SBF: “You can take the position that leverage is bad….I don’t believe that… I think you would have to have sacrificed the majority of the growth the industry has had to date…so think about what you’re throwing out with the bad parts.”
And in this 2019 post on Twitter, Caitlin decried BlockFi’s use of leverage, pointing out the its terms of use allowed it to rehypothecate clients deposits, which is illegal in Wyoming.
This week you are seeing many serious founders in the crypto market saying they are thankful for this washing out of excess and unfettered trading. But unfortunately, there’s a lot of hurt that comes with that as well. We are proud to be invested in a team that is doing it the right way.
Satoshi Nakamoto is the name used by the presumed pseudonymous[1][2][3][4] person or persons who developed bitcoin, authored the bitcoin white paper, and created and deployed bitcoin’s original reference implementation.[
