Custodia Stands Firm in Response to the Fed

Historic bank runs in the last two weeks underscore the dire need for fully solvent banks that are equipped to serve fast-changing industries in an era of rapidly improving technology. That is the exact model proposed by Custodia Bank – to hold $1.08 in cash to back every dollar deposited by customers. Unfortunately, the Federal Reserve took its eye off the ball and allowed bank-run risks to build at traditional banks – while simultaneously engaging in a crackdown against the digital asset industry at large and Custodia Bank in particular. Custodia Bank was approved for initial launch by both its primary bank regulator and an independent compliance consultant last Fall, but the Fed and the Kansas City Reserve Bank refused to follow the law, leaving Custodia no choice but to sue. Custodia has not been intimidated by the Fed’s coordinated attacks and behind-the-scenes press leaks of confidential Custodia information. The recently released Fed order is the result of numerous procedural abnormalities, factual inaccuracies that the Fed refused to correct, and general bias against digital assets. Rather than choosing to work with a bank utilizing a low-risk, fully-reserved business model, the Fed instead demonstrated its shortsightedness and inability to adapt to changing markets. Perhaps more attention to areas of real risk would have prevented the bank closures that Custodia was created to avoid. It is a shame that Custodia must turn to the courts to vindicate its rights and compel the Fed to comply with the law.


Interested parties and potential customers can contact Custodia at [email protected]. Press can contact Custodia at [email protected].

About Custodia: Custodia Bank, Inc. is a Wyoming bank formed to serve as a compliant bridge to the U.S. dollar payments system and a custodian of digital assets that can meet the strictest level of institutional custody standards. Custodia is required to fully comply with all applicable laws and regulations, including the Bank Secrecy Act and federal “know your customer,” anti-money laundering and related laws and regulations. Custodia will also comply with Wyoming’s special purpose depository institution and digital asset laws, which include requirements that fiat deposits be 100% reserved and that Custodia meet the strictest investor protections in the digital asset industry. This press release may contain forward-looking statements, including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results, or strategies (including product offerings, regulatory plans and business plans) and may change without notice. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements.

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