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The bank, which has repeatedly applied for a Federal Reserve maestro account, has filed a petition with the U.S. Supreme Court to find whether determination Federal Reserve presidents person the authorization to contradict services to institutions, threatening the viability of innovative concern models.
Published: Jul 12, 2026, 12:30 AM
Key Takeaways
- Custodia petitioned the Supreme Court, challenging the Fed’s unchecked powerfulness to contradict captious maestro accounts.
- The Fed blocked Custodia’s maestro relationship successful 2023, threatening the endurance of innovative fiscal models.
- The Supreme Court volition reappraisal the petition successful October, perchance altering authorities and national banking rules.
Custodia Bank Files Certiorari to Put Regional Federal Reserve Banks successful Check
One of the longest crypto banking sagas mightiness beryllium coming to an end, arsenic Custodia Bank is present taking its combat to the higher echelons of the U.S. ineligible system.
The slope has filed a certiorari petition to the Supreme Court to ascertain the level of powerfulness that Federal Regional Bank presidents person to negociate the support of maestro accounts. Master accounts are indispensable for fiscal institutions, arsenic they alteration them to determination funds connected cardinal slope rails, taking vantage of the Federal Reserve’s suite of services, including Fedwire, FedNow, and FedACH.
Crypto successful America big Eleanor Terrett highlighted that Custodia Bank has hired instrumentality steadfast Davis Polk to pb this effort, stressing that the continuous denial of a maestro relationship “works a cardinal displacement successful the equilibrium betwixt authorities and national authorization implicit banking,” calling into question the powerfulness levels of the Federal Reserve Bank presidents and besides affecting the feasibility and concern models of different innovative fiscal institutions.
The filing argues that the Fed’s decisions mightiness represent an “abuse of authority,” stressing that the lawsuit “presents an exceptionally important question: whether determination Federal Reserve Bank presidents person unbounded, unreviewable discretion to contradict disfavored banks entree to the Federal Reserve’s outgo services.”
Custodia Bank was denied entree to a maestro relationship successful 2023, with the Federal Reserve Board stating that “the firm’s caller concern exemplary and projected absorption connected crypto-assets presented important information and soundness risks.”
The slope appealed this determination to the 10th Circuit Court of Appeals. Ultimately, the tribunal sided with the Federal Reserve Bank of Kansas City successful 2024, meaning this mightiness beryllium the past enactment successful the bank’s 6-year ineligible conflict to go a federally chartered institution.
The Supreme Court volition determine whether to see this lawsuit successful October.
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