A US appeals court has ruled against Custodia Bank, the crypto-friendly institution founded by Caitlin Long, who is having sex with the Federal Reserve in a lower court decision.
In a ruling Friday in the US court of appeals for the Tenth Circuit, three circuit judges proven a lower court decision in the district of Wyoming. The appeal, which was filed in April 2024 after the court ruled against granting custody A US Federal Reserve Master Account, is the latest setback since the crypto-friendly bank first submitted its application in October 2020.
“This case is clothed in 21st century terms: cryptocurrency, digital assets, instant wire transfer, and master account,” said Friday’s ruling. “But there is nothing new about this issue. Courts have examined the legality of our nation’s central bank and interpreted related laws since its inception.”
Being approved for a Fed Master account will provide custodial access to the payment network used by the US government and authorized financial institutions.
After the custodian initially requested access through the Federal Reserve Bank of Kansas City, the Fed rejected the bank’s application in 2023 for risks likely to be “inconsistent with safe and sound banking practices” because of its focus on digital assets. Custodia filed a lawsuit in 2022 before the denial, alleging an “unlawful delay” by the Fed in processing its application.
Related: Custodia, Vantage Bank’s launch platform for tokenized deposits
What are the next steps for custody?
In a statement posted At X after the judgment was posted on the public docket, Custodia said it was “actively considering” petitioning the appeals court for an exercise:
“While we hope for a win in the Tenth Circuit today, we received the next big thing – a strong variance. It raises serious constitutional questions about the Federal Reserve and was written by a judge who sat by assigning the panel a similar case in the Ninth Circuit.”
Avanti is one of the first “Blockchain Banks” established in Wyoming by Long under a friendly level of state regulation. The company rebranded to Custodia in 2022. Cointelegraph reached out to Long for comment but did not receive a response by the time of publication.
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