In spite of pending cases involving Ripple and Coinbase, the XRP attorney stated that the Custodia case has become the most significant.
The U.S. Securities and Exchange Commission vs. Ripple Labs lawsuit is viewed as a legal dispute that will bring regulatory clarity to the cryptocurrency industry. However, the attorney for XRP holders believes that the Custodia Bank case holds the key to the future of the digital asset market.
Critical Custody Case For Crypto Industry
In a recent judgment by a district court in the United States, the judge denied the Federal Reserve’s motion to dismiss a lawsuit filed by the Custodia bank. The court, however, denied the bank’s request to compel the Federal Reserve to grant it a master account and membership. Custodia Bank can now prosecute its claims using standard procedures.
John Deaton, an amicus curiae in the XRP litigation, stated that the Custodia case has arguably become the most significant, despite the pending cases involving Ripple and Coinbase. Citing Chokepoint 2.0 in conjunction with the failure of multiple banks such as Silicon Valley Bank, Signature Bank, and others, he stated that crypto firms will always require banking for on- and off-ramps.
He stated that Custodia Bank has a very innovative policy of not engaging in fractional banking and maintaining reserves of funds. The council said that when a bank has 100 percent reserves, a bank run is no longer a concern.
This is because there would be no hysteria regarding the inability to withdraw funds or assets. According to Deaton, the Federal Reserve dislikes revolutionary ideas. The Fed is neglecting its statutory obligation by denying the Custodia Bank a charter, according to his statement. Nonetheless, the recent court order will permit Custodia Bank to proceed with the discovery process.
During the recent crackdown conducted by the US SEC, the crypto industry was granted a favorable ruling.
