Custodia Bank filed a notice of appeal in its ongoing case against the U.S. Federal Reserve on April 26.
The bank intends to appeal an earlier ruling that denied it the right to a Federal Reserve master account, a service that allows access to the central bank system without relying on intermediary banks.
Additionally, Custodia appeal a bill of costs through which one of the defendants, the Federal Reserve Bank of Kansas City, is seeking $25,728.25 related to the deposition transcripts.
Custodia argued the court should not deal with costs until it has ruled on the appeal and said the same court had dismissed costs in a similar case. He said an early award of costs “would risk paralyzing future legitimate lawsuits” against the Federal Reserve.
Previous decision
The court ruled on March 29 that Custodia Bank is not entitled to a Fed master account and has refused a writ of mandamus that would have required the Kansas Fed to rule on its request. Custodia's motion was subsequently dismissed for review.
The court ruled that banks are not entitled to a master account under the law simply because they can apply for one. It also found that Custodia could not demonstrate that the Federal Reserve Board of Governors made a final decision regarding the rejection.
The court also ruled that it did not have jurisdiction over Custodia's complaint due to the lack of a final decision.
Custodia Bank, which specializes in crypto services and is not FDIC insured, had argued that the Fed's delay and ultimate denial of its request was arbitrary and capricious, violating the Administrative Procedure Act (APA) . The law governs how federal agencies develop and implement rules.
Following the court decision, the CEO of Custodia Caitlin Long said the bank would appeal the decision during an interview with FOX Business on April 2.
Long also said recent cases have given the Federal Reserve “unfettered discretion” to deny new primary accounts and close existing accounts. She added that Custodia was not the only bank affected by such denial of access.