Custodia Bank, a cryptocurrency-friendly institution established by Caitlin Long, has lost its appeal in a ruling from the US Court of Appeals for the Tenth Circuit, which upheld the Federal Reserve’s decision regarding a master account application. The circuit judges affirmed the decision made in a lower court in Wyoming, marking another obstacle for Custodia since the company’s application was first submitted over five years ago.

“This case comes clothed in 21st Century terms: cryptocurrency, digital assets, instant wire transfers, and master accounts,” stated the judgment on Friday. “But there is nothing new about this issue. Courts have probed the legality of our nation’s central bank and interpreted the relevant statutes since the founding.”

Source Image Source: Courtlistener

Obtaining approval for a Fed master account would have provided Custodia with vital access to the US government’s payments network. However, following its initial application, the Federal Reserve rejected Custodia’s request in 2023 due to potential risks associated with its digital asset focus. Previously, Custodia filed a lawsuit in 2022 claiming that the Fed’s delay in processing was illegal.

What are Custodia’s Future Steps?

In light of the unfavorable ruling, Custodia expressed its intent to consider requesting a rehearing, stating on social media:

“While we were hoping for a win at the Tenth Circuit today, we received the next big thing – a strong dissent. It raised serious Constitutional questions about the Federal Reserve and was written by a judge sitting by designation on the panel of a similar case in the Ninth Circuit.”

Custodia, initially known as Avanti, was established in Wyoming to operate in a supportive regulatory environment, rebranding in 2022. Cointelegraph reached out to Caitlin Long for further comments but did not receive a reply prior to publication.