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

Custodia Bank faced another setback in its pursuit of a Federal Reserve master account, as the 10th Circuit Court of Appeals ruled against the company. This decision comes nine months after initial arguments presented by Custodia, which has been attempting to gain access to the Fed's payment infrastructure since it filed a lawsuit in 2022. The court emphasized that Federal Reserve Banks have the discretion to deny master account requests from eligible entities, concluding that it cannot be compelled to approve such requests. Custodia argued that the Fed's rejection of its application was unjust, leading to the appeal following a previous ruling that confirmed the Fed was not obligated to grant access to all depository institutions. The efforts of Custodia, founded by Caitlin Long, have been ongoing, but the latest court ruling highlights the challenges faced by crypto banks in securing their place within traditional banking systems and the regulatory environment governing financial institutions.

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