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HomeCrypto NewsMarketDeaton Explains Why Custodia Bank Lawsuit Is More Important Than Ripple & Coinbase 

Deaton Explains Why Custodia Bank Lawsuit Is More Important Than Ripple & Coinbase 


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Attorney Deaton says crypto businesses require banking for on and off-ramps. 

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Pro-XRP lawyer John E. Deaton has taken to Twitter to explain why he considers Custodia Bank’s lawsuit to be the most important legal battle in the crypto industry. 

Custodia Bank Wins Big Against Fed

Custodia Bank, a crypto-friendly bank, recorded a significant win yesterday in its legal battle against the Federal Reserve. According to reports, a Wyoming federal judge denied the Fed’s motion to dismiss the lawsuit filed by Custodia Bank. 

The crypto-friendly bank sued the Federal Reserve of Kansas in June 2022, claiming an unlawful delay in creating its master account. Instead of processing Custodia Bank’s application for a master account, the Fed filed a motion to dismiss the lawsuit. Interestingly, a Wyoming federal judge denied the Fed’s motion to dismiss the case.  

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Deaton Reacts 

Commenting on the development, attorney Deaton said the lawsuit may be the most important case out there today. 

However, many asked why Deaton described the Custodia Bank lawsuit as “the most important case out there” despite the existence of Ripple and Coinbase’s legal battles.  

Responding to the inquiry, attorney Deaton noted that all legal battles involving crypto companies like Ripple and Coinbase are important. However, many crypto enthusiasts are unaware of the significance of Custodia Bank’s lawsuit. 

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Crypto Businesses Need Banking 

According to the pro-XRP lawyer, crypto companies require banking for on and off-ramps. Deaton noted that the crypto industry recently witnessed Chokepoint 2.0, which reportedly led to the collapse of Silicon Valley Bank (SVB) and Signature Bank. 

The pro-XRP lawyer also mentioned regulators’ move to choke off crypto by ordering traditional financial institutions to stop offering financial services to crypto-related businesses. 

Deaton stressed that Custodia Bank has a unique and revolutionary idea to end these stringent tactics aimed at suffocating crypto businesses. Custodia Bank seeks to achieve this goal by engaging in fractional banking and maintaining 100% of its reserves.

“When you have 100% reserves, a bank run becomes a non-issue because there would be no fear of not getting all your funds or assets out at any moment,” Deaton added

He explained that the Federal Reserve did not like Custodia Bank’s revolutionary idea, which prompted the Fed to delay the bank’s application for its master account. 

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Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.



Lele Jima
Lele Jima
Lele Jima is a cryptocurrency enthusiast and journalist who is focused on educating people about how the nascent asset class is transforming the world. Aside from cryptocurrency-related activities, Jima is a lover of sports and music.

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