Custodia Bank has taken its case to the U.S. Supreme Court—the dispute between a state-chartered bank and the Fed over permissions for its master account. This case could redefine the regulatory boundary for crypto banking, so it’s worth watching for follow-up developments.

Gate.io News, citing crypto journalist Eleanor Terrett, reports that Custodia Bank, a crypto bank in Wyoming, has filed an application with the U.S. Supreme Court requesting a review of whether the Federal Reserve Bank has the authority to refuse to open master accounts for state-chartered banks that meet eligibility requirements. Custodia said the decision by the Federal Reserve Bank of Kansas City to reject its application changed the balance of regulatory authority between state and federal banks and involves constitutional issues such as the appointment and powers of the Federal Reserve Bank’s president. Previously, both the U.S. District Court for Wyoming and the U.S. Tenth Circuit Court of Appeals supported the Fed’s position, finding that it has broad discretion to refuse Custodia a master account. The Federal Reserve Bank of Kansas City said that its rejection of Custodia’s application in 2023 was mainly driven by concerns about its crypto-centered business model.