Crypto Bank Custodia Suffers Another Court Rejection in Fed Master Account Pursuit

Custodia Bank's efforts to secure a Federal Reserve master account were dealt another blow as the 10th Circuit Court of Appeals ruled against the financial institution, founded by Caitlin Long. This decision follows Custodia's lawsuit against the Federal Reserve, which began in 2022 after the Fed rejected its initial application for a master account. The appeals court stated that Federal Reserve Banks have the discretion to deny such requests, emphasizing that it is not obligated to grant every eligible institution access. The court's ruling reinforces the Fed's authority to safeguard the financial system by controlling who can access its payment rails. Following this latest ruling, Custodia expressed disappointment but remains committed to advocating for its position that the Fed should not be able to arbitrarily reject applications for master accounts.

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