Federal Reserve Denies Membership of Digital Asset Bank Custodia Bank After 18 Months

As CoinDesk reported, the Federal Reserve rejected digital asset bank Custodia Bank’s membership application, claiming that its “novel business model and proposed focus on cryptoassets pose significant safety and soundness risks.” The Fed also argued that “Custodia’s risk management The Framework does not adequately address concerns about increased risks associated with its proposed cryptographic activities, including its ability to mitigate money laundering and terrorist financing risks.” The decision comes nearly 18 months after Custodia first filed an application to join the Federal Reserve System.