$json.BodyEdited = “A US appellate court has ruled against Custodia Bank, the crypto-friendly institution founded by Caitlin Long, upholding a lower court decision favoring the Federal Reserve. The US Court of Appeals for the Tenth Circuit affirmed the denial of Custodia’s application for a Federal Reserve master account in a Friday judgment, delivering another setback more than five years after the bank first applied in October 2020.
The ruling highlights the enduring legal complexities surrounding access to the nation’s central banking system, despite the modern context involving cryptocurrency and digital assets. Approval for a Fed master account would have granted Custodia entry to the payments network utilized by the US government and authorized financial institutions. However, the Federal Reserve Bank of Kansas City initially rejected Custodia’s application in 2023, citing concerns that the bank’s focus on digital assets posed risks inconsistent with safe and sound banking practices.
Custodia had filed a lawsuit in 2022 accusing the Fed of unlawfully delaying its decision. Following the appellate court’s judgment, Custodia announced it was actively considering petitioning for a rehearing based on a strong dissent in the case raising significant constitutional questions about the Federal Reserve’s role — dissent penned by a judge sitting by designation on a related Ninth Circuit panel.
Founded originally as Avanti in Wyoming, a leading state for blockchain-friendly regulations, the company rebranded to Custodia in 2022. The ongoing legal battle reflects the challenges crypto banks face in gaining traditional banking privileges while operating under emerging regulatory landscapes.
Read more at: https://cointelegraph.com/news/custodia-crypto-bank-appeal-federal-reserve-master-account”;
$json.CompelingTitle = “Caitlin Long’s Custodia Bank Faces Major Legal Setback in Fight for Federal Reserve Master Account”;