Wyoming Crypto Bank Custodia Files Petition for Full Court Review of Federal Reserve Account Denial
Custodia Bank, a Wyoming Special Purpose Depository Institution (SPDI), filed a petition for rehearing en banc with the Tenth Circuit on December 15, 2025, seeking a full-court review of the Federal Reserve's denial of its master account.
The petition requests that all active circuit judges examine whether regional Federal Reserve Banks possess unreviewable discretion over master accounts for institutions that are legally eligible. Custodia argues that the October panel decision misinterpreted federal law and raises constitutional concerns regarding the Fed's authority. Specifically, the bank cites the Monetary Control Act's requirement that payment services be accessible to nonmember depository institutions.
The case focuses on Wyoming's SPDI framework, a 100% reserve regime developed to attract digital asset firms. Custodia contends that the denial restricts access to essential Federal Reserve payment services such as wire transfers and Automated Clearing House (ACH) transactions. The filing claims the Fed's denial effectively vetoes a state charter and disregards Wyoming regulators, who originally chartered Custodia in 2020, introducing federalism concerns.
Additionally, Custodia asserts that the unreviewable discretion granted to regional Reserve Bank presidents risks treating them as Officers of the United States wielding significant executive authority without proper appointment. The petition highlights a growing judicial divide on interpreting the Monetary Control Act, referencing a 2-2 circuit split and dissenting opinions tied to related cases such as Fourth Corner Credit Union v Fed KC.
Background context reveals that the Federal Reserve Bank of Kansas City denied Custodia's master account in January 2023 after a 27-month review period. The Fed cited risks associated with crypto-assets despite earlier indications that no major obstacles existed.
In regulatory developments, the Office of the Comptroller of the Currency (OCC) published findings in December 2025 showing that nine major national banks, including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo, have imposed inappropriate restrictions on crypto-related and other lawful businesses. These findings were made public within a broader context of debanking policies affecting certain sectors.
