The CryptoLaw founder, who is also XRP holders’ attorney, John Deaton, points out the most unarguably important case.
Interestingly, this turns out not to be Ripple or Coinbase. Deaton highlights this as the Custodia Bank case against the Federal Reserve. He adds that this might come as a surprise to several, considering the Ripple and Coinbase lawsuits pending.
Some people are surprised that I would say the Custodia case is arguably the most important case considering we have the @Ripple and @coinbase cases pending. They are all VERY important but most people are unaware of @CaitlinLong_ and Custodia’s situation. https://t.co/5RQTmYDKD4
— John E Deaton (@JohnEDeaton1) June 9, 2023
He states that Ripple, Coinbase and Binance SEC lawsuits are equally important, but fewer are aware of the Custodia case and its implications for the cryptocurrency industry.
Deaton goes on to explain the implications of the Custodia case, citing the recent Binance U.S. scenario.
In a recent update, Binance U.S. says its banking partners are preparing to pause fiat dollar withdrawal channels as early as June 13, thus suspending USD deposits.
This comes just days after the SEC sued Binance and its CEO, Changpeng Zhao. The CryptoLaw founder stated, “Whether we like it or not, today, crypto companies need banking for on- and off-ramps.”
Custodia Bank, according to Deaton, has a very controversial and revolutionary idea: not engage in fractional banking while maintaining 100% in reserves. With 100% in reserves, a bank run becomes a non-issue because there is no fear of not getting all your funds or assets out at any moment.
Deaton added that the Federal Reserve does not like this revolutionary concept, and ignoring its statutory mandate, it arbitrarily denied Custodia Bank a charter. Custodia sued the Fed, and the judge just denied the Fed’s motion to dismiss, allowing Custodia to go forward with discovery.
Attention to be placed on Ripple, Binance, Coinbase lawsuits
As fresh attention is paid to how the Custodia case unfolds in the coming weeks, greater attention will likewise be placed on recent SEC lawsuits against Binance and Coinbase, which have roiled the crypto industry.
Currently, the altcoin market is witnessing a massive sell-off, with some cryptocurrencies being discounted by as much as 30%. XRP remains down 7.61% in the last 24 hours at $0.49.
June 13 remains a significant date, as this coincides with the release of the Hinman documents, the Binance SEC hearing as well as a House hearing on digital assets.