Last Updated: 9 June 2022
Cryptobank Custodia is suing America’s central bank. Specifically, the Federal Reserve Board and the Federal Reserve Bank of Kansas City. In a federal law suit, they want to be proved right.
The name Custodia may not seem very familiar. However, Avanti Bank and Avanti Trust may ring a bell. The company was founded in 2020 by Caitlin Long.
They have filed suit against the central bank for “unlawfully” delaying an application the company made for a Federal Reserve Master Account.
The institution has been trying for almost 19 months to get direct access to the central bank without the intervention of an outside financial institution. However, the Federal Reserve Board does not want this. According to the Fed’s website, this procedure normally takes about 5 to 7 days.
Caitlin Long's #Bitcoin Bank Custodia sues Federal Reserve Board of Governors for Master Account Application delay
— AMBCrypto (@CryptoAmb) June 9, 2022
The bank has a charter for a ‘special depository institution’ and is therefore a full reserve crypto bank. They believe that with a master account they can save costs.
They also consider it “essential” its fundamental mission to bridge digital assets with the US currency system.
For this reason, Custodia in Wyoming has sued the board of governors of the Federal Reserve and the Kansas City Fed.
In this state, Cynthia Lummis is also a well-known bitcoiner. She is a big bitcoin fan and has presented new legislation. Wyoming wants to attract crypto companies. The Fed is not making it any easier.
Custodia took legal action to force the central bank to respond quickly to the application. The cryptobank should have direct access to the Federal Reserve to carry out its primary mission. They feel that the Federal Reserve now has a competitive advantage.
In the summer of 2020, Custodia, then known as Avanti Financial, reported that the Wyoming Division of Banking had accepted its completed bank charter application. The application process did go quickly and smoothly.