Kaitlin Long’s cryptocurrency bank sues the Fed

The Custodia cryptocurrency bank (formerly Avanti) подал иск против ФРС за задержку решения по заявке на доступ к платежной системе регулятора через мастер-счет (master account).

The complaint was filed in the U.S. District Court for the District of Wyoming. Kaitlin Long accused the regulator of delaying the processing of a “critically important for business Custodia filing.”

According to the complaint, 19 months had elapsed since the initial submission to the Fed.

“Such an account would give Custodia direct access to the Federal Reserve System, rather than through an intermediary bank. These entirely unlawful delays are compounded by nonstandard procedures adopted by the defendant, which they have interpreted as allowing federal agencies to operate in complete secrecy, whenever they wish, with no accountability,” the bank said.

The plaintiff added that in its own filings, the regulator describes decision timelines as “5-7 business days.” In Custodia’s view, the delay in processing the application has “clearly violated the legally mandated one-year deadline.”

In November 2020, the Wyoming State Banking Board unanimously approved Avanti‘s charter and business plan, granting it status as an official financial institution.

In July 2021, Long criticized the Fed for a biased stance toward cryptocurrency companies. In her view, by denying them direct access to its payment services, the regulator creates risks of disconnecting industry participants from the banking system.

In August of that year, the crypto bank submitted an application for Fed member-bank status.

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