Federal court ends Custodia Bank's legal bid for a master account
One judge sided with Custodia Bank, stating that a master account is “indispensable” for a bank’s day-to-day operations and being denied one is “akin to a death sentence.”
A US federal court has rejected Custodia Bank’s final attempt to challenge the Federal Reserve’s authority over granting master accounts — effectively ending the crypto-focused bank’s five-year-long battle for direct access to the central bank’s payment system.
The US Court of Appeals for the Tenth Circuit said in a filing on Friday that it wouldn’t hear Custodia’s final appeal on that point in a 7-3 vote.
Custodia first applied for a master account in October 2020, which allows financial institutions to hold reserves directly at the Federal Reserve and access its payment rails, enabling them to settle transactions without relying on intermediary banks.
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