Statement from Custodia Bank on Recent Bank Failures

The unfortunate demise of Silvergate, Silicon Valley Bank, and Signature underscore the danger facing any fractional reserve bank when all its demand depositors come back to claim their money at the same time and the bank does not have adequate cash. The problem is not digital assets; it is that the risky business models and practices of these banks went unnoticed and unregulated until it was too late.

We hope that this moment will be a wakeup call for regulators. Technology and information are moving faster, and this is enabling faster and faster bank runs. But digital assets are not going away. As with the introduction of any new technology, there is an information gap in the market and unscrupulous actors will take advantage where they can.

The U.S. urgently needs to put in place safe business models for the banks that bank the fast-moving industries, like that proposed by Custodia, so that the Federal Reserve does not need to backstop such banks. Custodia proposed to hold $1.08 in cash for every dollar deposited by its customers.

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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