Custodia Bank’s Legal Battle Over Master Account Ends in Court Ruling
- The US Court of Appeals for the Tenth Circuit rejected Custodia Bank’s final appeal regarding access to a master account, voting 7-3.
- Custodia first applied for a master account in October 2020, which would allow direct access to the Federal Reserve’s payment system.
- Despite Custodia’s arguments citing the Monetary Control Act, courts ruled that the Federal Reserve has discretion over granting master accounts.
- Kraken became the first crypto platform to receive a master account from the Federal Reserve Bank of Kansas City on March 4.
- Judge Timothy Tymkovich dissented, stating that being denied a master account is “akin to a death sentence” for banks.
This ruling effectively concludes Custodia Bank’s five-year struggle for direct access to essential banking services provided by the Federal Reserve. The decision highlights ongoing challenges faced by crypto-focused institutions seeking integration with traditional financial systems.
Custodia’s rejection underscores significant barriers in obtaining a master account, as highlighted by Kraken’s recent success in securing one just months prior. (Source)
