Custodia Bank’s introduction of Bitcoin custody comes after the company encountered several legal issues earlier this year. The Bitcoin-friendly bank Custodia Bank, established by proponent Caitlin Long, has released its platform for Bitcoin custody.
The company announced the launch of Custodia Bank’s Bitcoin custody service on X (formerly Twitter) on November 7. The service is aimed at companies that manage funds, advise clients on investments, serve as corporate treasurers, and are fiduciaries.
According to the announcement, Custodia Bank received permission from the Wyoming Division of Banking to begin offering its Bitcoin custody service, and this marks the launch shortly after.
Custodia Bank stressed in its announcement of the news that it is a non-lending platform created by Bitcoin enthusiasts that provides segregated custody accounts on its “custom-built Bitcoin custody platform.”
According to the statement, Custodia Bank provides combined custody for Bitcoin and US dollar services on a single platform, which is intended to streamline user operations and lower risks. Added Custodia Bank:
“Since we built our Bitcoin custody platform in-house, we’re especially grateful to those willing to help us by providing user feedback.”
Custodia Bank’s approval from the Wyoming Division of Banking comes after the company faced several regulatory obstacles. The bank’s application to join the Federal Reserve System was denied by the Federal Reserve Board in January 2023 on the grounds that it was “inconsistent with the required factors under the law.” Custodia then requested to reexamine its application for systemic membership, but the Fed declined.
The Fed’s board stated in a thorough report published in March 2023 that Custodia’s application was turned down because of worries about banks that had a significant concentration of cryptocurrency-related operations. According to reports, Custodia Bank began operations in August 2023, but the Fed has rejected most of the bank’s suggested business plan.
Custodia is a bank that was established in 2020 with the goal of serving as a custodian for digital assets and bridging the gap between them and the US dollar payments system. With its headquarters located in Cheyenne, Wyoming, the company was formerly known as Avanti Financial Group.