Wyoming-based crypto bank Custodia Bank has filed a petition for rehearing en banc, asking the full U.S. Court of Appeals for the Tenth Circuit to reconsider an earlier ruling that sided with the Federal Reserve in denying Custodia access to a master account.
The filing, submitted on December 15, 2025, requests that the case be reviewed by all active judges of the Tenth Circuit rather than the original three-judge panel that issued the October decision.
Challenge to October Ruling
Custodia’s petition argues that the appellate panel misinterpreted the Monetary Control Act, which the bank says grants any eligible bank the right to a Federal Reserve master account. According to the filing, the panel’s interpretation improperly expanded the Federal Reserve’s discretion and conflicted with the statute’s original intent.
The bank also claims the ruling undermines state banking authority, particularly Wyoming’s decision to charter Custodia as a special-purpose depository institution. Custodia contends that allowing federal regulators to override state-chartered bank eligibility raises significant legal and constitutional issues.
Constitutional and Federalism Concerns
In its petition, Custodia asserts that the decision raises serious constitutional concerns, including questions around separation of powers and federal overreach. The bank argues that the Federal Reserve’s denial effectively nullifies a state-issued bank charter, despite Congress establishing a framework intended to ensure access to Federal Reserve services for qualified institutions.
By seeking an en banc rehearing, Custodia is signaling that it views the case as having broad national implications, not just for its own operations but for the balance of power between federal regulators and state banking regimes.
What an En Banc Review Means
A rehearing en banc is relatively rare and is typically reserved for cases involving exceptional importance or where a court’s decision may conflict with precedent. If granted, the full Tenth Circuit would reconsider the legal questions at the heart of the dispute, potentially overturning or affirming the earlier ruling.
If the court declines the request, Custodia’s remaining option would likely be an appeal to the U.S. Supreme Court.
Implications for Crypto Banking
The outcome of the case could have far-reaching consequences for crypto-focused banks and special-purpose institutions seeking direct access to Federal Reserve payment rails. Master account access is widely viewed as critical for operating at scale within the U.S. financial system.
For now, Custodia’s petition keeps the legal battle alive, extending a closely watched case that sits at the intersection of crypto regulation, banking law, and federal authority.
