Custodia Bank has hired two lawyers to represent it in its case against the US Federal Reserve, Politico reported on May 26.
Custodia CEO Caitlin Long confirmed the news, saying the two attorneys have a “deep understanding of federalism issues” and experience with federal regulation of the crypto industry. She also praised each lawyer’s “excellent appellate record” in handling government controversies.
According to the report, Custodia has retained Ian Gershengorn, former deputy U.S. attorney general under President Barack Obama, and former attorney general of Virginia Michelle Kallen, to represent the company during the appeal.
Both attorneys are members of the law firm Jenner & Block LLP.
Fox Business reporter Eleanor Terrett acknowledged the decisionnoting that both have “strong winning records” at the U.S. Supreme Court and U.S. Courts of Appeals.
Custodia is expected to file a notice before the end of the day.
The profession of Custodia
In 2022, the company sued the Federal Reserve Board of Governors and the Federal Reserve Bank of Kansas City (FRBKC) for allegedly refusing to grant it a Federal Reserve main account.
A Federal Reserve master account is a crucial tool for financial institutions, allowing them to conduct various transactions directly with the Federal Reserve without having to rely on intermediary banks. This instant access streamlines processes and facilitates smoother fiat-crypto transactions, a growing area of interest in the evolving financial landscape.
The court ruled in March that Custodia Bank has no legal right to such an account, because the Board of Directors had not yet made a decision on this. Custodia subsequently submitted its final appeal on April 26.
According to Congressional Research Services, companies are looking to master accounts to access the central banking system without the need for intermediary banks, as access to such accounts allows for easier fiat-crypto transactions.
The case is separate from Custodia Bank’s efforts to join the Federal Reserve. The board rejected Custodia’s membership application in January 2023.