Core Viewpoint - The appeals court ruled that Custodia, a cryptocurrency bank, cannot compel the Federal Reserve to grant it a master account, affirming the Fed's discretion in such matters [2][5]. Group 1: Court Ruling - The 10th Circuit Court of Appeals concluded that the Federal Reserve Banks have the discretion to reject master account access requests from eligible entities [2]. - The ruling emphasized that the issue of the Fed's discretion has been examined by courts since the founding of the nation, despite the modern context of cryptocurrency and digital assets [3]. Group 2: Custodia's Position - Custodia argued that the laws governing master accounts require the Fed to grant access to any eligible depository institution, but the court disagreed with this interpretation [2]. - Following the ruling, Custodia expressed some satisfaction with a strong dissent from Judge Timothy Tymkovich, who criticized the majority for allowing unreviewable executive authority by the Fed [4]. Group 3: Implications and Next Steps - The majority ruling supports a previous judgment from March 2024 by a federal district court in Wyoming, which stated that the Fed must have discretion to deny master account applications to protect the financial system [5]. - Custodia is considering petitioning the 10th Circuit for a rehearing, indicating that the legal battle may continue [5].

A U.S. appellate court has ruled against Custodia Bank, the Wyoming-based crypto-focused institution founded by former Morgan Stanley executive Caitlin Long, in its long-running battle to gain direct access to the Federal Reserve’s payment system. In a decision filed Friday, the U.S. Court of Appeals for the Tenth Circuit affirmed an earlier ruling from the District of Wyoming that sided with the Federal Reserve Board of Governors and the Federal Reserve Bank of Kansas City. Source: Court Listener Tenth ...