Crypto Under Federal or State Laws?

Wyoming Defends ‘Legitimacy’ of Its Crypto Charter Framework in Custodia Lawsuit

The state's attorney general claims the Kansas City Fed’s decision to deny Custodia’s master account rests partly on “perceived inadequacies in Wyoming’s laws and regulations.”

Federal Reserve Board publishes its order denying the application by Custodia Bank, Inc., to be supervised by the Federal Reserve

The report condemned Custodia’s proposed business plan in every single category the Fed assesses, and claimed the decision not to federally insure deposits and Custodia’s dependence on a vibrant crypto market made it a danger to itself and its customers.

Custodia CEO Caitlin Long, who helped draft Wyoming’s crypto laws, has been vocal in her pushback against the Fed’s decision, citing Custodia’s proposal to be fully capitalized, holding $1.08 in cash for every dollar deposited by customers, and suggesting the real reason for denial is a Fed conspiracy to cut crypto off from the banking system.

This spat is exposing the rotten core of the fractional reserve system, where a fully collateralised bank becomes a threat to the very imprudent and rampant risk-taking that is the hallmark of the banksters.