Custodia, established as a special purpose depository institution in Wyoming, aimed to offer secure banking services for the crypto sector. Despite meeting state requirements and taking extra steps to demonstrate its commitment to safety, Custodia’s application for a Fed master account was met with delays and ultimately denied in an unprecedented 86-page report.

In this episode, Caitlin and Michelle explain why they believe the Fed’s rejection was politically motivated, how this relates to Operation Choke Point 2.0, the appallingly small number of American banks owned by women, where they are in their lawsuit against the Fed, and what this case means for the future of crypto banking in the U.S.

Show highlights:

• 00:00 Intro
• 01:52 What Custodia Bank is and how it got started in Wyoming
• 06:04 How Custodia got into a fight with the Fed to get its master account
• 09:58 How the dual banking system works in the U.S. and the differences between Custodia and traditional banks
• 18:15 Why Custodia filed a lawsuit against its own regulator
• 24:33 Why the Fed denied Custodia its applications and Caitlin’s response to the criticisms
• 29:57 The political coordination meant to “intimidate” Custodia, according to Caitlin
• 42:43 The amicus briefs that were filed in favor of Custodia
• 48:48 Caitlin’s reaction to the Fed’s enforcement action against Customers Bank 
• 53:35 Why Caitlin says that it’s “abusive and corporatist” that the SEC is granting exceptions to big banks
• 56:03 Why so few banks are owned by women and whether this played a role in Custodia’s denial
• 59:25 The next steps in Custodia’s case and whether a stablecoin is viable for them
• 1:05:21 Whether the elections are going to impact the case

Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com

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Guests:

• Caitlin Long, Founder & CEO of Custodia Bank
• Previous appearances on Unchained:
• Why Caitlin Long and Meltem Demirors Are Worried About Crypto’s Future in the US
• Caitlin Long: Why Avanti Will Be a New Kind of Crypto Bank
• Michelle Kallen, Partner at Jenner & Block

Links

Timeline

• PerkinsCoie: Federal Reserve Issues Final Guidelines for Master Account Access
• CoinDesk: Crypto Bank Custodia Sues Federal Reserve
• Davis Polk: Crypto bank sues Federal Reserve over delay in master account application
• Fed’s 86-page report of its denial of Custodia’s membership 
• Custodia’s response to the Fed report
• Custodia’s amended filing
• Judge Scott Skavdahl’s order to dismiss
• Davis Polk: District courts refuse to order Federal Reserve to grant master accounts to Custodia

Appeal

• Custodia’s appeal notice
• Custodia’s appeal filing

Amicus briefs for the appeal

• Bitcoin Magazine: The Federal Reserve, Custodia Bank, And The Battle For Sovereignty
• Paul Clement on behalf of the Digital Chamber and Global Blockchain Business Council (GBBC)
• Don Verrilli for Blockchain Association
• State of Wyoming
• Americans for Prosperity Foundation
• Members of the United States Senate Banking Committee and House Financial Services Committee
• Former Sen. Patrick Toomey

Customers Bank:

• CoinGeek: ‘Crypto’-friendly Customers Bank hit with Fed Reserve enforcement action

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