This Crypto-Friendly Bank is Suing the Fed and Why a Win Would Be Hugely Price-Positive for Digital Assets

    Custodia, a bank based in the United States that focuses on digital assets, has initiated legal action against the Board of Governors of the Federal Reserve System (FED) and the Federal Reserve Bank of Kansas City for “unlawfully” delaying its application for a master account with the FED. After seven members of Congress from the United States submitted a friend of the court brief earlier this week, the bank gained significant support. The politicians argued strongly before the Wyoming court that the FED’s petition to dismiss the lawsuit should be denied.

    The brief was submitted by five members of the Republican Party, including Cynthia Lummis, Steve Daines, and Kevin Cramer of the Senate; Warren Davidson, Ted Budd, Trey Hollingsworth, and William Timmons of the House of Representatives; and Kevin Cramer, Steve Daines, and Kevin Cramer of the House of

    Representatives. According to Yahoo! Finance, the state of Wyoming has also provided a paper that is somewhat comparable to this one.According to the company’s complaint, “Defendants have refused to act upon Custodia’s application for a master account with the Federal Reserve for more than 19 months,” which is the length of time the application has been pending.

    According to the bank, the suing institutions failed to adhere to the statutory timeframe of one year when handling their application. They also broke the timeline that was included on the documentation for the master account, which stated that making a decision of this nature should take between five and seven business days. If Custodia is successful in obtaining a favourable judgement, this may make it possible for other cryptocurrency firms to expedite registration processes more quickly.

    Lummis, who is the senator for Wyoming and serves in the United States Senate, has positioned herself as a crypto-friendly member, which paves the way for legislation that might support the expansion of the business. In June of this year, she collaborated with Kirsten Gillibrand, the Democratic senator who represents the state of New York, to introduce a draught bill that was later given the name the “Responsible Financial Innovation Act.” The purpose of the bill was to “make a clear distinction between digital assets that are commodities or securities.”

    According to the description of the bill, the objective of the legislative proposal that has support from members of both parties is to “give digital asset firms [with] the opportunity to select what their regulatory requirements would be.”Caitlin Long, a former executive at Morgan Stanley, launched Custodia in the year 2020. Initially, the company conducted its business under the name Avanti. The bank has made it clear that one of its primary goals is to offer its corporate clients the complete spectrum of banking and financial services, with a particular emphasis on digital assets. Custodia is a special purpose depository institution that was chartered in the state of Wyoming (SPDI).

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