Custodia Sues Federal Reserve over Delay in Master Account Approval

Caitlin Long’s crypto bank, Custodia has filed a lawsuit against the US Federal Reserve Board of Governors and the Federal Reserve Bank of Kansas City on Tuesday for an “unlawful” delay in the decision for the approval of a master account.

A master account allows a bank to directly access the Federal reserves without the need for the services of an intermediary bank.

According to the lawsuit, the Fed’s documents specify that the decision for granting a master account usually takes 5 to 7 business days. However, Custodia’s application is now pending for 19 months, and the Fed has “clearly violated the 1-year statutory deadline for doing so.”

A Crypto Bank

Custodia, formerly known as Avanti Bank, was founded in 2020 and is headed by Caitlin Long. It is based in Wyoming and received approval under the Special Purpose Depository Institutions (SPDIs), becoming one of the first “ blockchain 
Blockchain

Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamper with. The Evolution of BlockchainBlockchain was originally invented by an individual or group of people under the name of Satoshi Nakamoto in 2008. The purpose of blockchain was originally to serve as the public transaction ledger of Bitcoin, the world’s first cryptocurrency.In particular, bundles of transaction data, called “blocks”, are added to the ledger in a chronological fashion, forming a “chain.” These blocks include things like date, time, dollar amount, and (in some cases) the public addresses of the sender and the receiver.The computers responsible for upholding a blockchain network are called “nodes.” These nodes carry out the duties necessary to confirm the transactions and add them to the ledger. In exchange for their work, the nodes receive rewards in the form of crypto tokens.By storing data via a peer-to-peer network (P2P), blockchain controls for a wide range of risks that are traditionally inherent with data being held centrally.Of note, P2P blockchain networks lack centralized points…