Crypto group backs Custodia in Supreme Court battle over Fed access

The Blockchain Association has urged the US Supreme Court to hear Custodia Bank's challenge to the Federal Reserve's denial of its application for a master account, which would provide the crypto-focused bank direct access to the Fed's payment system. The association argues that federal law requires the central bank to make its payment services available to eligible nonmember banks and that the Fed should not have broad discretion to deny access.

The case is linked to alleged crypto debanking under "Operation Choke Point 2.0," where federal regulators discouraged banks from serving the digital asset industry. Custodia, a Wyoming-chartered bank focused on digital assets, applied for a Fed master account in 2020 but was denied in 2023 by the Federal Reserve Bank of Kansas City.

The Tenth Circuit Court of Appeals later ruled that the regional Fed bank had discretion to reject the request, leaving the Supreme Court as Custodia's only remaining avenue for review.

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