According to CoinDesk, Wyoming federal judge Scott Skavdahl rejected Custodia Bank’s claim that it was entitled to the U.S. Federal Reserve Master Account and membership in the Federal Reserve. Judge Skavdahl said in Friday's decision that federal law does not require the U.S. central bank to provide access to the master account system to all eligible depository institutions, and there is no evidence that the Federal Reserve Board of Governors influenced its regional branches to reject Custodia Bank's Account application. Custodia Bank sued the Federal Reserve in June 2022, saying the Kansas City Federal Reserve delayed decision-making on its master account application. Master accounts allow banks and depository institutions to access the Federal Reserve directly without going through an intermediary bank. Custodia Bank revised its complaint against the Fed last February after the Fed rejected its application (the Fed later issued a scathing report explaining its decision). In the amended complaint, Custodia Bank argued that the Federal Reserve Board of Governors unlawfully directed the Kansas City Fed to deny its application and that the Fed did not have the authority to deny applications from nonmember depository institutions. Judge Skavdahl wrote in Friday's order that the law does not require the Fed to grant master account access to applicants and that the evidence favors the decision being made by the Kansas City Fed, not the Board of Governors. Custodia spokesman Nathan Miller said in a statement: "Challenging the Fed's hard-line approach has been an uphill battle, but Custodia Bank remains committed to creating a safe, technology-enabled bank. We are reviewing the court's decision and all options , including appeals.”
