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Custodia Bank's Fed Lawsuit Is as Important as XRP's: John Deaton

Thu, 07/27/2023 - 10:17
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Godfrey Benjamin
Custodia Bank and Ripple have similar case fundamentals according to new insight shared by John Deaton
Custodia Bank's Fed Lawsuit Is as Important as XRP's: John Deaton
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The ongoing legal battle between Custodia Bank and the Federal Reserve has taken a new turn with three lawsuits now filed against the regulator in three different circuits. Commenting on the crackdowns on the feds by industry stakeholders, crypto lawyer John Deaton noted that the Custodia lawsuits are just as important as those of XRP.

Major Ripple v. SEC Update: XRP Explodes 16% as Judge Torres Delivers Pivotal Summary Judgment Verdict

Custodia Bank has accused the feds of denying its applications for a master account, which would enable it to operate like its peers in the broader fintech ecosystem. According to Deaton, the Custodia lawsuit is a showcase that the major regulators were neglecting their statutory obligations.

John Deaton said the court cases are threatening to "end the Federal Reserve's arbitrary and capricious conduct." While Deaton has been notably involved in some of the lawsuits involving big crypto entities, he said in the near future, he plans to cover more of these cases through his CryptoLawUS firm.

The significance John Deaton attributed to the Custodia Bank v. Federal Reserve lawsuit is such that the outcome of the legal brawl will also set major precedence for the broader crypto ecosystem. By refusing to deprive the bank of access to a master account, other innovators will not find the right impetus to dive into the industry.

Ripple's Chief Lawyer Roasts SEC After Epic Victory

Can Custodia Bank win against Federal Reserve?

The legal battle between Custodia Bank and the Federal Reserve has called for speculation among industry participants as it concerns who has the upper hand to win the case. While it might be too early to judge, the U.S. justice system has proven to be impartial and attempted to stem the jurisdictional powers of the top government agencies.

Compared to the Ripple v. SEC case, Judge Analisa Torres gave her summary judgment that favors both the blockchain payments firm and the commission. The win handed to Ripple, however, changed the dynamics as it established XRP as a nonsecurity on secondary markets. 

The trust in this move lends credence to the system, with many hoping Custodia Bank may end up as a winner in the long run.

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About the author

Godfrey Benjamin is an experienced crypto journalist whose main goal is to educate everyone around him about the prospects of Web 3.0. His love for crypto was birthed when, as a former banker, he discovered the obvious advantages of decentralized money over traditional payments. With his vast experience covering various aspects of Web3, Godfrey's articles has been featured on, Cryptonews and Coingape, among others.