According to The Block, the U.S. Tenth Circuit Court of Appeals denied Custodia’s request for an en banc rehearing in a 7-3 vote, upholding the panel’s October 2025 ruling that the Federal Reserve has the authority to approve or deny master account applications from eligible institutions. Custodia, a Wyoming-chartered special-purpose depository institution founded by Caitlin Long, applied for a master account in October 2020 and was subsequently denied in January 2023 by the Kansas City Fed, which cited risks associated with its cryptocurrency business model. Custodia filed a lawsuit arguing that eligible depository institutions are legally entitled to master accounts, but its claims have been rejected at all court levels.
U.S. Court Upholds Fed's Decision, Rejects Custodia's Request for Full Rehearing
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Summary
The U.S. Tenth Circuit Court of Appeals upheld the Fed’s decision, rejecting Custodia Bank’s request for a full rehearing in a 7-3 vote. The ruling reaffirms the Fed’s authority to approve or deny master account applications, in line with CFT compliance requirements. Custodia, a Wyoming-based crypto-focused bank, applied for a master account in 2020 but was denied in 2023 due to concerns regarding its business model. The court did not endorse Custodia’s legal arguments. As global regulators such as the EU advance frameworks like MiCA, U.S. institutions continue to face stringent oversight.
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