Custodia Bank refused the federal reserve system of the United States – Bits Media

US Federal Reserve Bank (previously known as Avanti Bank) for membership in the system, Since his new business model represents unacceptable risks for security.

Application Custodia Bank for opening a master account, which could give a financial institution the possibility of conducting direct operations with other credit organizations through the reserves of the Central Bank, was rejected by the Council of the Federal Reserve System (FRS) USA.

“Custodia risk management systems are insufficient to solve problems, related to the cryptocurrency activity offered by the bank, including the inability of a financial organization effectively counteracting the risks of money laundering and financing terrorism ", - said in the Fed.

Custodia Bank CEO Kaitlin Long (Caitlin Long) stated, that Custodia "has always been actively striving for federal regulation, Often surpassing the framework of all requirements, which are applied to traditional banks ". Therefore, it is "surprised and extremely disappointed by the decision of the Fed.

The decision was made almost through 18 months after that, How Custodia Bank has applied for membership in the Federal Reserve System. Last year, Caitlin Long filed a lawsuit against the Council of Managers of the Fed and the Federal Reserve Bank of Kansasas City for the wire in the processing of the application.