Judge Sides with Federal Reserve in Custodia Bank Crypto Case
Won the lawsuit filed against the US Federal Reserve, according to a decision by Wyoming District Judge Scott Skavdahl. Storage Bank Regarding access to the Master Account and its compliance with the Administrative Procedure Act (APA).
Federal Reserve Wins Against Custodial Bank
Judge Skavdahl’s decision clears the air on the Federal Reserve’s discretion in issuing Master Accounts, which are essential to a bank’s access to the services offered by the Federal Reserve.
In his decision, Skavdhal sided with the Federal Reserve, whose decision to accept or reject such requests must be approved. The decision is critical as it supports the Federal Reserve’s refusal to grant Custodia Bank a Master Account.
Allegations and the Court’s Response
The lawsuit filed by Custodia Bank against A.Ş. Federal Reserve It contained many main arguments; the most important of which was the alleged violation of the APA. The bank argued that the Federal Reserve’s rejection was “arbitrary, capricious, an abuse of discretion, or otherwise unlawful.”
However, Judge Skavdahl rejected this argument because he did not have the authority to review the Fed’s decision. Additionally, Custodia’s request for a declaratory judgment was also denied, strengthening the Federal Reserve’s position.
BREAKING NEWS: Judge @custodiabank etc. @Federal Reserve He sided mostly with the Fed in summary judgment and DENIED Custodia’s petition to review the APA Claim and the Motion for Judgment on the Statutory Mandamus Claim.
The full verdict is here:
— Eleanor Terrett (@EleanorTerrett) March 29, 2024
This legal case has attracted a lot of attention, especially after the increasing popularity of crypto and blockchain technology in banking. Also chaired by Custodia Bank CEO Caitlin Longhas been at the forefront of integrating blockchain technology into traditional banking services.
Master Account applications were seen as a test of the Federal Reserve’s willingness to open up to cryptocurrency-friendly banks. The decision could impact a broader range of similar institutions trying to negotiate the waters of the United States banking system’s regulatory system.
Custodia’s Ongoing Commitment
Reacting to the decision, a representative of Custodia Bank commented:
This statement is a manifestation of Custodia Bank’s determination to achieve its goals within the legal framework and perhaps appeal the decision.
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Kelvin is a distinguished author specializing in crypto and finance, with a bachelor’s degree in Actuarial Science. Known for her sharp analysis and insightful content, she is fluent in English and specializes in comprehensive research and on-time delivery.
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