Crypto bank Custodia is filing a lawsuit against the U.S. Federal Reserve for allegedly delaying the approval of its master account application.
According to recent court documents, Custodia is suing the Fed for supposedly refusing to act upon the bank’s master application, which would give it direct access to the Federal Reserve, for over a year and a half.
Having direct access to the Federal Reserve would allow Custodia to operate optimally, according to the filing.
“For over 19 months, [the] Defendants have refused to act upon Custodia’s application for a master account. Such an account would allow Custodia to directly access the Federal Reserve, rather than going through an intermediary bank.
The wholly unlawful delaying conduct is aggravated by the standardless processes the Defendants have apparently adopted, which they have interpreted to allow agencies of the federal government to act in complete secrecy whenever and however they choose with no accountability or rules to govern their decision-making.”
The lawsuit also claims that the delay prevents Custodia from being able to participate in the marketplace, which gives an unfair advantage to already-established financial firms.
“The government-in-secrecy has the effect, if not the purpose, of precluding judicial review required by the most elementary standards of due process of law.
Continued delay, in these circumstances, prevents newcomers like Custodia from introducing innovation and competition in the financial services marketplace and, not coincidentally, benefits the established financial institutions.”
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