Crypto Bank Custodia Challenges Fed Authority
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Custodia Bank, a Wyoming-chartered crypto-focused bank, has taken its legal fight with the US Federal Reserve to the next level. After years of pushback, the bank is now asking the full Tenth Circuit Court of Appeals to review the Fed’s refusal to grant it a master account.
The case has become a flashpoint for a much larger debate over who truly controls access to the US financial system. At its core, the dispute questions whether federal regulators can effectively override state-approved banks without clear legal limits.
Why a Fed Master Account Is CriticalA Federal Reserve master account is not optional for banks. It provides access to core payment systems such as wire transfers and the Automated Clearing House (ACH). Without it, a bank cannot operate normally, regardless of its legal status.
Custodia argues that it meets all eligibility requirements under federal law as a nonmember depository institution. Yet the Kansas City Federal Reserve denied its application, leaving the bank operationally frozen. Custodia says this makes Wyoming’s decision to charter the bank meaningless in practice.
