Wyoming-based crypto bank Custodia is reportedly deliberating more layoffs as it braces for ongoing regulatory scrutiny under the Biden administration. The decision comes as the crypto sector faces unprecedented challenges, including de-bankings and increasing pressure from US regulatory agencies.

Meanwhile, cryptocurrency market participants remain hopeful of a better regulatory environment amid expectations of policy shifts with the incoming Donald Trump administration.

Custodia Banks Plans More Layoffs Amid Regulatory Pressure

Custodia Bank might enact more layoffs after retrenching 25% of its staff in August. This comes as the digital asset-focused bank continues to devote resources to its ongoing lawsuit with the Federal Reserve (Fed), which denied the lender a master account last year.

“Fox Business has learned that Wyoming-based crypto bank Custodia Bank will implement further layoffs in order to preserve capital,” Fox Business correspondent Eleanor Terrett reported.

The bank did not immediately respond to BeInCrypto’s request for comment on the supposed layoffs. Early in 2023, Custodia Bank was denied a master account, which would give it access to the Fed’s liquidity facilities. The lawsuit challenges this denial.

Custodia Bank has been trying to conserve capital as it continues its legal battle against the Fed. During its last layoffs three months ago, the company’s founder and CEO Caitlin Long attributed the retrenchments to “right-sizing.” She said it was necessary to maintain operations while preserving capital during the lawsuit against the Fed.

Long also indicated that the efforts could continue “until after Operation Choke Point 2.0 ends,” referring to the alleged ongoing crackdown on digital assets under the Biden administration. Operation Choke Point was the name of an Obama-era effort that “choked off” high-risk industries such as payday lending, gambling, and firearms from banking access.

“I’m incredibly proud of the Custodia team, the services we’re building for our customers and our resilience in the face of repeated de-bankings due to no fault of our own. I especially thank Custodia’s customers and shareholders who have helped us continue the fight for the durability of banking access for the law-abiding US crypto industry,” Terrett added, citing Long.

Noteworthy, oral arguments in the lawsuit will take place on January 21. This will be the day after Donald Trump’s inauguration, following his recent win.

Regulatory Pressures Intensify But There’s Hope for Change Under Trump

Custodia is not alone in struggling against regulatory pressure. The crypto industry at large has recently faced mounting regulatory challenges. High-profile companies like Consensys have also recently announced significant layoffs.

As BeInCrypto reported in late October, the blockchain software firm behind Ethereum infrastructure tools like MetaMask revealed it was cutting 20% of its workforce. Its CEO, Joe Lubin, cited mounting pressure from the US SEC (Securities and Exchange Commission), among other uncertainties in the regulatory space.

“The broader macroeconomic conditions over the past year and ongoing regulatory uncertainty have created broad challenges for our industry, especially for US-based companies,” Lubin shared.

Meanwhile, the Biden administration has been accused of taking an increasingly aggressive stance toward the crypto industry. Among the accusations include enforcing stringent banking restrictions and debankings. Nevertheless, Trump’s recent win and upcoming inauguration reignited hope within the crypto sector for a more supportive regulatory environment.

The hope hinges on the delivery of Trump’s crypto blueprint. Experts believe Trump’s pro-business stance could revive the industry by easing regulatory pressures on crypto.

Brian Armstrong, CEO of Coinbase, has also expressed optimism about a potential shift in regulatory attitudes. Armstrong recently urged the next SEC chair to drop “frivolous cases” against crypto firms and issue a public apology. He slammed the current SEC composition for what he views as overly aggressive enforcement, calling out Gary Gensler.

“The next SEC chair should withdraw all frivolous cases and issue an apology to the American people. It would not undo the damage done to the country, but it would start the process of restoring trust in the SEC as an institution,” Armstrong posted.

Still, Custodia’s ongoing lawsuit is a symbol of the crypto industry’s fight for legitimacy and fair treatment within the financial sector. While the industry’s outlook remains uncertain in the short term, there is cautious optimism that the incoming Trump administration could bring relief to embattled crypto firms.

Binance Coin (BNB) has stayed above $600 since November 8 but has struggled to retest $700 or near its all-time high.

This stagnation has left many BNB holders disappointed, raising the question: can BNB reach a new peak?

Binance Coin Experiences Low Volatility, Falling Interest

While BNB trades around $612, the volatility around it appears to be the reason why it has remained above $600 but has yet to make another substantial price increase.

When an asset is described as volatile, it means its price experiences significant fluctuations within a short timeframe. High volatility signals greater risk due to unpredictable price swings, but it also offers the potential for higher rewards.

Therefore, if buying pressure increases during high volatility, the asset’s price might increase significantly. If this volatility comes during high selling pressure, the price might tumble significantly.

According to Santiment, BNB’s one-day volatility has declined from its recent peak, suggesting reduced price fluctuations. This drop in volatility could make it difficult for BNB to achieve a notable breakout above the $600 mark, as the market may lack the momentum needed for a significant move.

In addition, Open Interest (OI), a metric that tracks the level of speculative activity around a cryptocurrency, has declined. High OI usually signals increased capital inflows into contracts, often indicating strong buying pressure capable of driving prices upward. 

Conversely, a drop in OI reflects reduced liquidity in the market, often associated with selling pressure and a potential price decline. For BNB, the OI has remained relatively stagnant since November 19, indicating that traders are hesitant to inject additional liquidity or take on new contracts. 

Further, the OI is notably lower at $532.08 million than on November 14. This lack of speculative activity indicates reduced market momentum, reinforcing the likelihood that BNB’s price will struggle to break above the $600 threshold.

BNB Price Prediction: Drop to $551 Likely

Similar to Open Interest, BNB’s price has followed a consistent trend since July, repeatedly facing resistance around $612. This indicates persistent efforts by bears to prevent the cryptocurrency from challenging its $724 all-time high.

Currently, with BNB trading near the same resistance level, a decline is possible. Historical patterns suggest that if the coin fails to break through, it could retrace to $551, as it did previously.

Similar to Open Interest, BNB’s price has followed a consistent trend since July, repeatedly facing resistance around $612. This indicates persistent efforts by bears to prevent the cryptocurrency from challenging its $724 all-time high.

However, a surge in volatility paired with strong buying pressure could challenge this outlook. In such a scenario, BNB might not stop at holding above $600 but also climb toward $660—or even retest the $724 high.

Crypto markets went into disarray after Phillip Banks, the creator of the viral “Chill Guy” meme, announced plans to issue legal takedown notices for unauthorized for-profit uses of his copyrighted character.

This move sent ripples through the community and triggered a sharp decline in the market value of the Chill Guy (CHILLGUY) meme coin before a quick recovery.

Chill Guy Creator’s Legal Threats Shake Up Viral TikTok Meme Coin

In a post on X (Twitter), Banks shared his intentions to pursue copyright infringement legal actions for the unauthorized use of his artwork to make a profit.

“Just putting it out there, chill guy has been copyrighted. Like, legally. I will be issuing takedowns on for-profit-related things over the next few days. Not like brand accounts using him as a trend, that is kind of something I do not really care about (I just ask for credit. or Xboxes.). Mainly unauthorized merchandise and shitcoins,” Banks expressed.

The Chill Guy meme gained traction on TikTok, where its relatable depiction of a laid-back character resonated with millions. The parody meme coin quickly became a sensation on Crypto Twitter and TikTok, with influencers, presidents, sports brands like UFC, LA Clippers, Paris Saint-Germain (PSG), and everyday users alike using it on social media. The coin’s rapid growth is seen as a sign of the increasing influence of social media platforms like TikTok in shaping crypto trends.

At its peak, the Solana-based coin had over 100,000 holders, breaking records for one of the fastest-growing meme coins by user adoption. However, as is characteristic of meme coins, the hype proved fleeting. Banks’ legal threats and the natural volatility of the meme coin market triggered a nearly 67% drop in market cap, plunging it to around $187 million after a peak of $579 million on Wednesday.

Banks’ lawsuit declaration displays the growing tension within the meme coin sector. While memes like Chill Guy can spark viral trends and generate immense economic activity, their creators often find themselves sidelined, with little to no financial benefit from the frenzy.

Banks clarified that his legal actions would not target non-commercial uses of Chill Guy. For instance, he showed leniency towards brands using the meme, such as when the gaming brand Halo used the artwork in a tweet saying:

“When Master Chief trades you his plasma pistol for your rocket launcher but you’re just a chill marine,” Halo wrote.

Banks humorously responded by asking Halo for an Xbox in return. He said, “Hello, Halo. Since you used my art, can I have an Xbox? Thanks.”

Crypto Community Reacts to Banks’ Demands

Banks’ legal stance was met with humor and advice from the crypto community. Notable figures on Crypto Twitter suggested he monetize the situation rather than litigate.

“Brother, just ask for a 2% token supply as is tradition and be happy,” user Thelema quipped.

Meanwhile, some crypto executives like Solana Legend, the co-founder and managing partner at Frictionless Capital and MonkeDAO, noted the cultural significance of the Chill Guy meme. The prominent figure in the Solana ecosystem noted that the platform offers a unique way for people to discover crypto through relatable memes.

“Chill guy is becoming the Bored Ape Yacht Club / OpenSea moment for normies to be onboarded onto crypto. 5 minutes on TikTok and you can see people discovering memes,” the analyst wrote.

The viral success of CHILLGUY highlights TikTok’s growing role in driving crypto adoption among non-crypto natives (normies). Nevertheless, the latest debacle reflects the volatile nature of meme coins, where hype often outweighs fundamentals. Early investors in CHILLGUY rode a wave of speculation fueled by TikTok, only to see gains evaporate when the momentum shifted.

While Banks’ legal threats have shaken the meme coin’s momentum, they also highlight the challenges of monetizing intellectual property in the digital age. His attempt to protect his creation may set a precedent for other meme creators grappling with the commercialization of their work.

Phillip Banks did not immediately respond to BeInCrypto’s request for comment.