As a crypto investor with a background in law and a keen interest in the digital assets industry, I find the latest development in the Custodia Bank vs. Fed case particularly noteworthy. Paul Clement’s decision to file an amicus brief on behalf of the crypto industry adds significant weight to this ongoing legal fight.
Approximately a week following Custodia Bank’s filing of an appeal in the 10th Circuit Court against the Federal Reserve’s denial of a master account, Paul Clement, a former Solicitor General, has submitted a supportive brief on behalf of the crypto industry.
Paul Clement Takes Custodia Bank vs Fed Fight Ahead
In the ongoing legal battle between Custodia Bank and the Federal Reserve, Paul Clement submitted an amicus brief on July 3 in favor of the crypto industry. Notably, Clement has recently garnered acclaim for his successful reversal of the Chevron Defense in a Supreme Court case involving Loper Bright fishermen.
In the ongoing legal dispute, The Digital Chamber (TDC) and the Global Business Blockchain Council-USA (GBBC-USA) have made it clear that they hold substantial stakes and distinctive viewpoints in the matter. With a wealth of expertise in the digital assets sector, these organizations contend that denying state-chartered banks the opportunity to engage in national banking due to their association with digital assets could impede the expansion and prosperity of the burgeoning trillion-dollar blockchain industry.
Two organizations contend that adhering to the lower court’s ruling would grant politically unanswered federal authorities unrestrained authority to stifle innovation, denying legitimate businesses vital access to the international financial system.
The District Court ruled that the Federal Reserve Bank of Kansas City (FRBKC) holds the ultimate authority to deny non-member depository institutions access to a master account without review.
TDC and GBBC contended that even though they adhered to the law, this court ruling established a risky precedent for any sector potentially at odds with Federal authorities.
Paul Clement Raises Constitutional Concerns on Fed’s Structure
In the amicus brief, the former Solicitor General has raised some constitutional questions regarding the Fed’s structure. Clement states: “In sum, by affording Federal Reserve Bank presidents significant and largely unconstrained discretionary power, the district court’s decision raises serious constitutional questions under Article II.”
“The ruling of the district court could undermine the coexistence of two banking systems by providing Federal Reserve Bank officers with unrestricted authority to significantly impede lawfully operating state-chartered banks,” he commented instead.
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2024-07-04 06:37