$json.BodyEdited: “A US appellate court has upheld the Federal Reserve’s decision to deny Custodia Bank — the crypto-friendly institution founded by Caitlin Long — a master account with the Fed. The Tenth Circuit Court of Appeals affirmed a lower court ruling from the District of Wyoming, rejecting Custodia’s bid to gain access to the core payments network used by the US government and authorized financial institutions.
Custodia first applied for the master account in October 2020, hoping to bridge traditional banking with the digital asset space. However, the Federal Reserve Bank of Kansas City rejected the application in 2023, citing concerns that Custodia’s crypto-focused business model posed risks inconsistent with safe and sound banking practices.
Custodia responded legally, suing the Fed in 2022 over what it alleged was an unlawful delay in processing the application. After the appeals court’s recent ruling in April 2024, Custodia stated it is “actively considering” petitioning for a rehearing. The bank highlighted a strong dissenting opinion that raised significant constitutional questions around the Federal Reserve’s authority.
Originally founded as Avanti and launched under Wyoming’s progressive regulatory framework, Custodia represents one of the pioneering efforts to establish ‘blockchain banks’ in the US. Despite this setback on the federal level, the bank’s struggle underscores the broader tension between emerging digital asset financial services and established regulatory structures.
For further details, see the full article: https://cointelegraph.com/news/custodia-crypto-bank-appeal-federal-reserve-master-account”
$json.CompelingTitle: “Custodia Crypto Bank’s Federal Reserve Dream Denied Again: A Battle at the Crossroads of Traditional Finance and Digital Assets”