A Wyoming court has rejected Custodia Bank's claim for a Federal Reserve master account in a ruling against the institution led by Caitlin Long. Judge Scott W. Skavdahl delivered a summary judgment on March 29, asserting that Custodia Bank lacks a statutory entitlement to a master account and thus cannot obtain one through a writ of mandamus.

Custodia Bank contended that the Federal Reserve Bank of Kansas City (FRBKC) was obligated to grant a master account simply because it met eligibility criteria. However, the court sided with the regulator, affirming its discretionary authority to reject such requests.

The judge emphasized that the relevant law cited by Custodia does not explicitly mandate the provision of master accounts to all eligible depository institutions. Instead, it ensures certain services for depository institutions without specifying master accounts for every entity. Additionally, the court highlighted that the Board of Governors has not issued a final agency decision on the matter, rendering Custodia's challenge premature.

Custodia Bank expressed its intention to assess the judgment and consider its next steps in response. Despite the setback, the company reaffirmed its commitment to its vision.

Custodia Bank specializes in digital asset payment and custody services for business clients. Although its cryptocurrency activities are distinct from the case concerning master accounts, the Federal Reserve expressed reservations about its crypto-focused operations in a related application for membership and a master account, which were both denied on January 27, 2023.