Overview
- Custodia Bank’s petition for an en banc rehearing was denied by the U.S. Court of Appeals for the Tenth Circuit in a 7–3 vote, leaving the October 2025 panel ruling intact.
- The outcome preserves the interpretation that regional Federal Reserve Banks may use discretion in granting or denying master accounts, following Custodia’s 2023 rejection.
- Judge Timothy Tymkovich issued a dissent warning that unreviewable Reserve Bank discretion raises constitutional concerns and that denial of a master account is “akin to a death sentence” for a bank.
- On March 4, the Federal Reserve Bank of Kansas City granted Kraken a limited master account that provides access to Fedwire but not the full suite of traditional services.
- The Federal Reserve’s Board is developing a “skinny” master-account policy that could standardize limited-access options nationwide, with timing and application details still in early stages.