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]

Core Viewpoint - The US Court of Appeals for the Tenth Circuit upheld the Federal Reserve's authority to deny Custodia Bank's application for a master account, affirming a lower court's ruling in favor of the Federal Reserve [1][2]. Group 1: Court's Ruling - The court determined that Federal Reserve Banks have the discretion to reject master account applications from eligible institutions, rejecting Custodia's argument that the Monetary Control Act mandates account availability [2][3]. - The majority opinion emphasized that the language of the Monetary Control Act does not impose a mandatory duty to grant accounts, citing the discretionary authority granted by the Federal Reserve Act [2][4]. Group 2: Custodia Bank's Position - Custodia Bank, a Wyoming-chartered Special Purpose Depository Institution, argued that it was entitled to a master account due to its eligibility under federal law and the language of the Monetary Control Act [3][6]. - The bank's application for a master account was initially submitted in October 2020, and it filed a lawsuit against the Federal Reserve in 2022 over delays exceeding 19 months [6]. Group 3: Dissenting Opinion - Judge Tymkovich's dissent argued that the "shall be available" language in the Monetary Control Act is a clear command, raising concerns about the executive authority granted to unappointed officials by the majority ruling [5]. - The dissent highlighted potential issues under the Appointments Clause, suggesting that the ruling could lead to significant unreviewable authority [5].