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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.
Alex DovbnyaCustodia 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.
This is a big deal. Remember what I said about Caitlin and @custodiabank’s battle with the Fed? After considering ChokePoint 2.0, Caitlin’s fight is arguably just as important (if not more) as the @Ripple XRP case. The Fed, just like the SEC, has been ignoring its statutory… https://t.co/PUxYMshy8U
— John E Deaton (@JohnEDeaton1) July 27, 2023
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.
Gamza KhanzadaevCan 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.
Yuri Molchan
Gamza Khanzadaev
Dan Burgin
Alex Dovbnya