Custodia Financial institution, a crypto-friendly Wyoming financial institution, stated it plans to cut back its providers because it prepares for coverage reforms within the house.
Custodia Financial institution, a financial institution based by Bitcoin advocate Caitlin Lengthy, is scaling again its operations because it awaits anticipated coverage modifications that would create a extra crypto-friendly regulatory setting, American Banker has discovered.
In response to a Nov. 21 report, the Cheyenne-based financial institution determined to cut back its actions to protect capital “in anticipation of major crypto policy reforms,” a choice made earlier this week by the financial institution’s board of administrators. Moreover, the financial institution goals to guard its patents on bank-issued stablecoins and its “clean compliance and operating record,” the report reads, citing Custodia’s assertion.
The choice follows workforce reductions earlier this 12 months, with the financial institution slicing 9 of its 36 workers to preserve assets. Custodia stays embroiled in a authorized battle with the Federal Reserve over entry to a grasp account, which might grant it direct entry to Fed fee providers. In March, a courtroom dominated in opposition to Custodia’s request for such an account and dismissed a associated petition for evaluate.
Fed rejection provides gas to Custodia’s authorized wrestle
Custodia CEO Caitlin Lengthy expressed gratitude to “shareholders who have helped us continue the fight for durability of banking access for the law-abiding U.S. crypto industry.”
In October 2020, Custodia Financial institution utilized to the Kansas Metropolis Federal Reserve for a grasp account, a transfer that may permit it to supply the identical providers as establishments with direct entry to the Fed’s fee techniques. Three years later, nevertheless, the Federal Reserve rejected the applying, citing the financial institution’s crypto-friendly stance and its standing as a state-chartered establishment moderately than a nationally chartered one, as elements complicating its eligibility.
