Appeals court backs Fed’s decision to deny master account to crypto firm

A federal appeals court has ruled that the Federal Reserve is not required to provide a master account to a cryptocurrency firm, saying such access could “impair the Fed’s ability to safeguard our nation’s financial system.”

The case stems from Wyoming-based Custodia Bank’s 2020 request for a master account from the Federal Reserve Bank of Kansas City. The request was denied after officials said Custodia’s crypto-focused business model posed unacceptable risks to the Fed’s payment systems. Custodia sued in the U.S. District Court for Wyoming, which sided with the Fed.

In a 2-1 ruling, the Tenth Circuit Court of Appeals upheld that decision.