The Federal Reserve Board has rejected Custodia Financial institution’s utility to change into a member of the Federal Reserve System. In its announcement, the Fed stated that the applying was “inconsistent with the required components below the regulation.” It additionally claimed Custodia had an “inadequate” administration framework and cited an earlier joint declaration by the Fed with the Federal Deposit Insurance coverage Company and Workplace of the Comptroller of the Foreign money that discovered crypto belongings to be at odds with sound banking practices.
STATEMENT FROM CUSTODIA BANK about right now’s Federal Reserve motion on its membership utility. Its grasp account utility stays pending: pic.twitter.com/QkMjcT508J
— Custodia Financial institution ™ (@custodiabank) January 27, 2023
Regardless of the rejection, the financial institution’s utility for a grasp account stays pending, the financial institution mentioned in a tweet. A so-called “grasp account” that comes from Reserve membership permits a financial institution to make worldwide transfers and perform different necessary capabilities. Custodia, headed by Caitlin Lengthy, utilized for the grasp account in 2020 and sued the Fed over the lengthy delay in contemplating the applying in June.
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