US Appeals Court Rejects Custodia Bank’s Fed Account Bid in Major Blow to Crypto Bank
Key Takeaways:Court Rejects Custodia’s Request for RehearingCustodia’s Push for Direct Fed AccessJudge Warns About Impact on Banks
Although the court declined to reopen the case, not all judges agreed with the decision. Circuit Judge Timothy Tymkovich issued a dissent, arguing the issue deserved further review. He described a master account as essential for a bank operating in the modern financial system and warned that denying one can significantly restrict a bank’s ability to function. Tymkovich also cited that this allows the Fed to have an effective option of including or excluding state-chartered banks which may use the U.S. banking system fully on the provision that the Fed will retain significant discretion to accept or reject accounts. The ruling preserves the authority of Fed to deliver master accounts and continues to demonstrate the collision thus far unfolding between crypto-centered lenders and conventional banking overseers. Read More: From Prison, Sam Bankman-Fried Says FTX Was Never BankruptAbout Author
