Custodia, the Wyoming-based crypto bank, filed a new petition in its long-running legal battle against the Federal Reserve over access to a master account, requesting a new en banc hearing before the full Court of Appeals for the Tenth Circuit.
Custodia Bank is asking the court to reconsider its October ruling that sided with the Federal Reserve in denying the bank access to the central bank’s main payment services, in a fight that has become a milestone for crypto banking access to the US payments system.
In the petition for rehearing en banc filed Dec. 15, Custodia urges all of the court’s active judges, not just the original three-judge panel, to review the October decision that upheld the Federal Reserve’s authority to deny master accounts even to state-chartered and federally supervised banks.
Custody argued that the three-judge panel’s ruling improperly grants the Federal Reserve “non-reviewable discretion” over access to core payments infrastructure, undermining state banking authority and raising “serious constitutional questions” by entrusting that power to officials not designated as officials of the United States under Article II of the Constitution.
The petition also argued that the panel misinterpreted the Monetary Control Act, which states that Federal Reserve services “shall be made available” to eligible depository institutions. The bank maintains that the ruling improperly converts that language into optional discretion, allowing regional Federal Reserve banks to effectively override state banking statutes.
The October ruling marked another setback for Custody, which has litigated its exclusion from the Federal Reserve’s payments infrastructure since it first sued the Fed in 2022. It remains uncertain whether the entire Tenth Circuit agrees to rehear the case, but the petition ensures that the debate over crypto banks’ access to financial pipelines is far from over.
