Custodia is a crypto-focused bank from Wyoming and was declined because of nature of balance sheet assets as well as lack of appropriate risk management framework.

The Fed in particular called out the potential for their business to support illegal activities and their lack of sufficient risk management.

The diligence necessary to satisfy the regulators is significant but there has been no success to my knowledge by any crypto company. They are simply not banks.

Reuters

Custodia, which is based in Wyoming and is chartered through the state as a special purpose depository institution, lacked a sufficient risk management framework to address the heightened risks associated with crypto, the Fed said, including crypto’s potential use in money laundering and terrorist financing activities.

.. #crypto #riskmanagement