- Custodia’s application did not meet legal requirements
- Cryptocurrencies incompatible with safe and sound banking practices
- Custodia seeks same regulation as traditional banks
The United States Federal Reserve has declined Custodia Bank’s request to review its application for membership in the Federal Reserve System.
The Fed announced its refusal, stating that the Federal Reserve Board had already determined that Custodia’s application did not meet the legal requirements.
In addition, it cited a joint statement issued by both Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, which stated that cryptocurrencies were incompatible with safe and sound banking practices.
Custodia has expressed a desire to join the Federal Reserve System so it may be governed by the same regulations as traditional banks and pave the way for other crypto-banks to be subject to the same stringent regulations.
In related news, the U.S. Securities and Exchange Commission and New York’s top financial regulators opposed Binance’s $1 billion acquisition of cryptocurrency lender Voyager, according to published sources. This is the most recent regulatory action against cryptocurrency firms.
According to a filing by the SEC, the proposed transaction may violate regulations governing the unregistered offer and sale of securities. Furthermore, it asserted that a U.S. probe might render the purchase difficult.
