Crypto Bank Custodia is Suing the US Federal Reserve: Report

Digital asset bank Custodia, formerly known as Avanti, is suing the Federal Reserve Board of Governors and the Federal Reserve Bank of Kansas City for delaying a decision on its application for a central bank master account. Custodia Goes Against Federal Reserve According to a report from Forbes, Custodia has sued the US central bank over its delay in approving an application to set up a master account with the Federal Reserve. Custodia Bank, which went by the name Avanti Bank and Trust, was founded in 2020 by Morgan Stanley banker Caitlin Long. For about 19 months, it has been seeking to get a Fed master account so that it can directly access the central bank without going through a third-party intermediary financial institution. The lawsuit argued that the Fed’s own paperwork says that “a master account decision “ordinarily takes 5-7 business days,” and that the processing delay had “clearly violated the 1-year statutory deadline for doing so.” “Through this lawsuit, Custodia seeks to ensure that its Federal Reserve master account application receives the fair dealing and due process guaranteed to it by both federal statute and the U.S. Constitution. Custodia has satisfied every rule applicable to it, and has gone beyond by applying to become a Fed member bank,” wrote the company’s spokesperson. If Custodia wins the suit or is granted a Fed master account, it will be the first digital asset bank in the United States to secur...