Wyoming-based crypto bank Custodia filed a new petition in its long-running legal battle against the Federal Reserve over access to a master account, requesting a rehearing en banc before the full Tenth Circuit Court of Appeals.
Custodia Bank is asking the court to reconsider its October ruling that sided with the Fed in denying the bank access to key central bank payment services in a battle that has become a pacesetter for cryptobank access to the US payment system.
In the petition for rehearing en banc filed Dec. 15, Custodia is calling on all active judges on the court, not just the original three-judge panel, to review the October decision that upheld the Fed’s authority to deny master accounts even to state-chartered, federally supervised banks.
Custodia argued that the three-judge panel’s ruling improperly gives the Fed “opaque discretion” over access to core payments infrastructure, undermines the state’s banking authority and raises “serious constitutional questions” by leaving that power to officials who are not designated as officers of the United States under Article II of the Constitution.
The petition also argued that the panel misunderstood the Monetary Control Act, which states that Federal Reserve services “shall be available” to eligible depository institutions. The bank argues that the ruling improperly converts that language into discretionary discretion, allowing regional Federal Reserve banks to effectively override state bank charters.
The October ruling marked another setback for Custodia, which has been litigating its exclusion from the Fed’s payments infrastructure since it first sued the Federal Reserve in 2022. Whether the full Tenth Circuit will agree to rehear the case remains uncertain, but the petition ensures that the debate over cryptobanks’ access to the financial overlord is far from over.
