Custodia Bank, a cryptocurrency-focused bank in Wyoming, has significantly expanded its legal team in response to the Federal Reserve’s ongoing lawsuit. Politico revealed on May 26th that Custodia had hired two eminent attorneys with a track record of success in federal court cases. These well-known additions coincide with Custodia’s appeal of the Federal Reserve’s denial of their master account application. The Federal Reserve’s payment system may be accessed directly by financial institutions through master accounts, a prerequisite for Custodia to provide its complete suite of cryptocurrency custody services.
Introducing the Legal Solicitors
Custodia called on Ian Gershengorn and Michelle Kallen as his two new attorneys. Both have distinguished legal careers and extensive backgrounds in pertinent fields.
Ian Gershengorn
Under President Barack Obama, Gershengorn was the Principal Deputy Solicitor General of the United States. Because of this position, he was at the vanguard of the Supreme Court’s high-stakes case argument.
Michelle Kallen
Kallen’s tenure as Virginia’s Solicitor General has given her much experience. Her specialty is handling intricate federal regulation matters, a crucial component of Custodia’s case.
Partners at Jenner & Block LLP, renowned for its proficiency in managing intricate legal matters, especially those involving government disputes, are Gershengorn and Kallen. Eleanor Terrett, a reporter for Fox Business, emphasized their stellar performance history by pointing out that they have “strong win records” at the Courts of Appeal and the Supreme Court.
A Situation with Greater Consequences
Caitlin Long, the CEO of Custodia, highlighted the significance of the recruits, pointing to their “deep understanding of federalism issues” and prior experience with federal regulation of the cryptocurrency sector. This shows that getting a master account is not the only thing Custodia’s case involves. It might establish precedents in terms of how cryptocurrency institutions engage with the Federal Reserve and the larger financial system.
"Now, @custodiabank is pulling out some big guns to fire back…“This team brings a deep understanding of #federalism issues & extensive experience in federal regulation of [#digitalassets]. They also have a stellar appellate track record in government controversy cases.”" https://t.co/O6pFi8accC
— Caitlin Long 🔑⚡️🟠 (@CaitlinLong_) May 6, 2024
The Federal Reserve still needs to provide a statement regarding Custodia’s legal approach and the new attorneys’ engagement. However, given its potential to influence the direction of cryptocurrency banking in the US, industry watchers predict that this case will be closely followed.
What Happens to Custodia Next?
With these influential lawyers on their side, Custodia seems well-positioned to handle the intricate legal proceedings. Legal arguments will be polished and presented to the court soon.
Although the exact timing of the case is still unknown, court cases of this kind can take months or even years to conclude. It is crucial to remember that court decisions may be challenged, which could lead to additional legal proceedings.
Is Crypto Banking Entering A Sign of Maturation
Custodia’s choice to assemble such an accomplished legal team is proof of the industry’s maturity in cryptocurrency banking.
If Custodia wins her case, other cryptocurrency institutions hoping to enter the mainstream banking system may face serious consequences. In contrast, a loss would result in harsher rules and a more difficult road ahead for cryptocurrency companies. A victory for Custodia could open the door for further acceptance of cryptocurrency banking.
Observing how this lawsuit plays out and affects cryptocurrency banking in the US will be fascinating.
