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

Custodia Bank's attempts to secure a Federal Reserve master account have been thwarted again by the 10th Circuit Court of Appeals, which ruled against the company's appeal nine months after the initial hearing. The court concluded that the Federal Reserve has the discretion to reject access requests, emphasizing the importance of safeguarding the financial system. Custodia had filed a lawsuit against the Federal Reserve in 2022 after its application for a master account was rejected. Following a ruling in 2024, which stated that the Fed was not obligated to grant master account access, Custodia appealed. Despite their efforts to challenge the decision, including amending their lawsuit to argue the Fed's rejection was unjustified, the recent court ruling confirmed that the Fed's discretion in granting such applications is permissible. The case highlights ongoing tensions between cryptocurrency institutions and regulatory bodies in the U.S. financial landscape.

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