Crypto Bank Custodia Sues Federal Reserve for Delaying Approval of Main Account Application

Crypto bank Custodia is suing the US Federal Reserve for allegedly delaying approval of its main account application.

According to recent court documents, Custodia is suing the Fed for allegedly refusing to comply with the bank’s primary request, which would give it direct access to the Federal Reserve, for more than a year and a half.

Having direct access to the Federal Reserve would allow Custodia to operate optimally, according to the filing.

“For more than 19 months, [the] The defendants refused to comply with Custodia’s request for a main account. Such an account would allow Custodia to access the Federal Reserve directly, rather than going through an intermediary bank.

The utterly unlawful dilatory conduct is compounded by the non-standard processes the defendants have apparently adopted, which they have interpreted as allowing federal government agencies to act in total secrecy when and how they choose, without accountability or rules. to govern their decision-making. ”

The lawsuit also claims that the delay prevents Custodia from being able to participate in the market, which gives an unfair advantage to already established financial companies.

“Government in secret has the effect, if not the purpose, of preventing the judicial review required by the most elementary standards of due process of law.

Continued lag under these circumstances prevents newcomers like Custodia from bringing innovation and competition to the financial services marketplace and, not coincidentally, benefits established financial institutions.

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Featured Image: Shutterstock/Salamahin/Kiselev Andrey Valerevich