Crypto bank Custodia filed suit against the U.S. Federal Reserve on Tuesday, saying the central bank was unlawfully delaying a decision on its application for a master account.
In the filing to the United States District Court of Wyoming, Custodia accused the Federal Reserve Board of Governors and Federal Reserve Bank of Kansas City of delaying the application process 19 months and called the master account “critical” to Custodia’s business.
“Such an account would allow Custodia to directly access the Federal Reserve, rather than going through an intermediary bank,” Custodia said in the complaint, which also accuses the Fed of adopting “standardless” procedures that allowed them “to act in complete secrecy, whenever and however they choose.”
The suit said that the Fed’s own paperwork says that “a master account decision “ordinarily takes 5-7 business days,” and that the processing delay had “clearly violated the 1-year statutory deadline for doing so.”
In February, Wyoming-based Custodia, which was formerly called Avanti Bank, seemed to be moving closer to acquiring the master account when it received a routing number issued by the American Bankers Association (ABA) – a key milestone in the process to receive a Fed account.
Routing numbers are used to identify banks for checks and other transactional purposes and are issued only to federal or state-chartered financial institutions that are also eligible to have a Fed account, according to the ABA’s website.
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