Court Denies Crypto Bank Custodia's Bid to Pry Master Account From Unwilling Fed

Core Points - A federal appeals court in Denver upheld the Federal Reserve's right to deny Custodia a master account, affirming a lower court's decision that Custodia is not entitled to one despite being technically eligible [1][4] - The Federal Reserve's Kansas City branch determined that Custodia's crypto-focused business model posed undue risks to the U.S. banking system [2][3] - Master accounts are essential for banks to access Federal Reserve services, yet no crypto-focused banks have been granted such accounts [3] Court Decision - The decision was made by a panel of three judges, with a 2-1 majority, and was written by Judge David Ebel, a Reagan appointee [4][5] - The dissenting opinion by Judge Timothy Tymkovich argued that the relevant statute mandates the Fed to provide payment services to eligible non-member banks, including Custodia [5][6] Company Response - Custodia expressed disappointment over the ruling but noted the strong dissent as a positive aspect, indicating potential for further legal action [6][7] - The company may seek a rehearing by the Tenth Circuit, citing a split decision due to another ruling on a similar issue in the same jurisdiction [7]