Federal Reserve (FED) · Supreme Court · Decrypt
The Blockchain Association argues the Fed’s denial threatens the dual banking system
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“Whether federal regulators, based on their own discretionary whims, can intrude on state prerogatives and debank lawful businesses is a question of exceptional importance with broad consequences for the national economy,” they wrote.
Key facts
- The Blockchain Association is urging the Supreme Court to take up Custodia Bank’s fight with the Federal Reserve, arguing the central bank should not have the broad power to deny payment system
- In December, the bank asked the full Tenth Circuit to rehear the case
- The brief said Custodia’s fight is the latest phase of Operation Choke Point 2.0, invoking the Obama and Biden-era program critics said pressured banks to cut ties with unfavorable industries
- In a well-documented campaign termed Operation Choke Point 2.0, the federal government under the prior administration ‘used vague rules, excessive discretion, informal guidance, and aggressive
Summary
The Blockchain Association filed an amicus brief supporting Custodia Bank’s petition for Supreme Court review. Custodia is challenging a ruling that upheld the Fed’s denial of its master account application. The group says the case could shape how much power federal regulators have over state-chartered banks. The Blockchain Association is urging the Supreme Court to take up Custodia Bank’s fight with the Federal Reserve, arguing the central bank should not have the broad power to deny payment system access to eligible state-chartered banks. In the amicus brief filed on Wednesday supporting Custodia’s petition, the crypto trade group said a lower court ruling in favor of the Fed gives federal regulators a quiet way to cut lawful businesses out of the banking system.