Custodia Bank, a financial institution made to connect crypto and the US dollar payments system, has filed a lawsuit against the Federal Reserve Board of Governors and the Federal Reserve Bank of Kansas City, Forbes reports.
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The bank says the parties have "unlawfully" delayed its application for about 19 months. Custodia is seeking a master account with the Federal Reserve that would reduce its costs and is "vital" to its business model. The bank said in the lawsuit that the regulator has to act within a year, but no action was made within that timeframe.
Custodia Bank's spokesperson Nathan Miller said the bank meets all requirements to become a Fed member bank:
"Through this lawsuit, Custodia seeks to ensure that its Federal Reserve master account application receives the fair dealing and due process guaranteed to it by both federal statute and the US Constitution."
Founded by Morgan Stanley banker Caitlin Long in 2020, Custodia raised $37 million in a Series A round from Morgan Creek Digital, Coinbase Ventures, Binance.US, Slow Ventures, and others.
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