Tenth Circuit denies Custodia rehearing, ending its bid for a Fed master account amid Kraken approval

On March 13, the Tenth Circuit voted 7–3 against granting Custodia Bank’s petition for a rehearing before the full court, declining to revive the bank’s challenge to the Federal Reserve over access to the central bank’s payment system and master account services; the October ruling that Reserve Banks have discretion to deny master accounts remains in place ^{[1] [2]}.

The dismissal is a major setback for Custodia’s years-long effort to obtain a master account. One judge dissented, saying a master account is “indispensable” for a bank’s day-to-day operations and that denying one is “akin to a death sentence” ^[3].

The decision arrives days after the Federal Reserve granted a limited master account to crypto firm Kraken, underscoring the timing of the appeals court’s refusal to reopen Custodia’s case ^[4].

With the Tenth Circuit’s denial of rehearing, Custodia’s federal court effort to secure a Federal Reserve master account has effectively ended for now, leaving Reserve Banks’ discretion over account access intact ^{[1] [2] [4] [3]}.