Federal Appeals Court Denies Custodia Bank’s Master Account Bid While Kraken Secures Historic Approval

TLDR The US Court of Appeals for the Tenth Circuit denied Custodia Bank’s rehearing request in a 7-3 decision on Friday The Wyoming-based bank’s quest for Federal Reserve master account access began in October 2020 On March 4, Kraken made history as the first cryptocurrency company to obtain a limited master account through the Federal Reserve Bank of Kansas City A dissenting judge described master account denial as tantamount to “a death sentence” for banking operations The Federal Reserve is developing a comprehensive “skinny” master account framework for cryptocurrency companies nationwide Custodia Bank’s prolonged battle for Federal Reserve master account access has reached its conclusion. The US federal appeals court delivered a 7-3 decision on Friday, rejecting the cryptocurrency-focused bank’s petition for a rehearing. BREAKING: Court OFFICIALLY DENIES Custodia Bank Rehearing in Fed Master Account Fight The 10th Circuit has REJECTED @custodiabank’s request for a FULL court rehearing in its battle with the @federalreserve over access to a Fed master account. The vote was 7–3… pic.twitter.com/HZ9O9Vcmtu — Diana (@InvestWithD) March 13, 2026 The Wyoming-based financial institution submitted its initial master account application in October 2020. Master accounts enable financial entities to maintain reserves directly with the Federal Reserve and utilize its payment infrastructure without relying on intermediary banking relationships. After the Federal Reserve denied its application, Custodia initiated legal proceedings. The bank’s legal argument centered on the Monetary Control Act, which it claimed guarantees state-chartered banks access to Federal Reserve services. Successive court rulings have affirmed the Fed’s authority to exercise discretion when evaluating master account applications. The Tenth Circuit Court of Appeals’ Friday ruling definitively settles this legal dispute. Three judges registered their opposition to the majority decision. In a forceful...