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The founder of the crypto bank Custodia appealed in court against the unreasonable delay in opening a correspondent bank account of the crypto bank for 19 months.
Former Morgan Stanley CEO Caitlin Long sued the board on Wednesday, June 8Governors of the U.S. Federal Reserve System and the Federal Reserve Bank of Kansas City.The litigation is caused by "the defendants' unlawful delay in processing an application critical to Custodia's business"
"For more than 19 months, the defendants have refused to respond to Custodia's application to open a crypto bank master account with the Federal Reserve.The delay in opening a master account not only violated the statutory deadline for approving such applications, but also hindered innovation and competition in the financial services market," the statement of claim, signed by Caitlin Long, said.
Custodia has applied for the mainaccount and opening a master account immediately after receiving a bank charter in Wyoming, in October 2020. According to the lawsuit, a Kansas City Fed representative told the bank in early 2021 that the application had been accepted and there were "no show stoppers" preventing registration.
Fed Chairman Jerome PowellPowell, speaking at a Senate hearing in January, said delays in processing master account applications for Custodia, as well as cryptocurrency exchange Kraken, were due to the “highly precedential nature” of granting cryptocurrency companies traditional banking powers.
</p>Formerly Wyoming Senator Cynthia Lummis(Cynthia Lummis) said she would oppose the reappointment of Jerome Powell as Fed chairman. She claims that the head of the Federal Reserve supports the practice of delaying the registration of the credentials of cryptocurrency companies, which amounts to “denying applicants by delaying them until they die.”
