US Court Rejects Custodia Bank Bid in Fight With the Federal Reserve

The US Tenth Circuit Court of Appeals has rejected Custodia Bank’s request to reopen its legal battle with the Federal Reserve regarding access to the US banking system. The court affirmed an earlier ruling stating that Federal Reserve banks have the authority to decide which institutions receive access to “master accounts,” which are crucial for direct connection to the Federal Reserve’s payment system. Custodia, a digital asset bank, sought this access to provide payment services for crypto firms, but the Federal Reserve denied the request in 2023 due to concerns about the bank’s crypto-focused business model and potential risks to financial stability. While dissenting judges warned of unchecked power granted to Reserve Banks, the court’s decision represents a setback for Custodia and other crypto banks aiming for direct access to the US financial system.

(Source：BeInCrypto)