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

Custodia Bank's pursuit for a Federal Reserve master account faced another setback as the 10th Circuit Court of Appeals ruled against it. This ruling comes nine months after the court heard arguments regarding the bank's efforts to secure access to the Fed's payment systems. Custodia, a Wyoming-based special purpose depository institution founded by Caitlin Long, initially sued the Federal Reserve in 2022, challenging its decision to reject the application for the master account. The court determined that Federal Reserve Banks have the discretion to deny access to such requests, denying Custodia's claims. The appeals court referenced the statutes granting the Fed authority to prioritize safeguarding the nation’s financial system. As a result, Custodia remains unable to access the central bank's payment rails, despite amending its lawsuit and appealing lower court decisions since its original rejection.

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