Caitlin Long sues the US Federal Reserve in the interests of her crypto bank

The founder of the crypto bank Custodia has challenged in court the unreasonable delay in opening a correspondent bank account of the crypto bank for 19 months.

Former Morgan Stanley CEO Caitlin Long on Wednesday, June 8, filed sued the US Federal Reserve Board and the Federal Reserve Bank of Kansas City. The lawsuits are due to “defendants’ unlawful delay in processing an application critical to Custodia’s business”

“For more than 19 months, the defendants 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 approval of such applications, but also became an obstacle to innovation and competition in the financial services market, ”says Caitlin Long in a statement of claim.

Custodia applied for a master account and a master account immediately after receiving the bank charter in Wyoming, in October 2020. According to the lawsuit, a spokesman for the Kansas City Fed told the bank in early 2021 that the application had been accepted and “there are no show-stoppers” preventing registration.

Fed Chairman Jerome Powell, speaking at a Senate hearing in January, said the delays in processing applications for Custodia master accounts, as well as the Kraken cryptocurrency exchange, are due to the “extremely precedent-driven nature” of granting traditional banking powers to crypto companies. .

Earlier, Wyoming Senator Cynthia Lummis said she would oppose the reappointment of Jerome Powell as chairman of the Fed. She claims that the head of the Fed supports the practice of delaying the registration of the powers of cryptocurrency companies, which is tantamount to “denying applicants by postponing until they die.”