Cryptocurrency-friendly bank Custodia Bank lays off employees amid ongoing lawsuit with the Federal Reserve

ChainCatcher news, according to Fox Business, the Biden administration's regulatory crackdown on cryptocurrency has led to a significant restructuring at a small but high-profile crypto bank. The media learned that Custodia Bank, a Wyoming financial institution providing banking services to cryptocurrency companies, notified employees on Thursday morning that it would lay off 9 out of 36 employees in order to preserve capital amid its court battle with the U.S. central bank.

The layoffs come as Custodia is embroiled in a legal dispute with the Federal Reserve, as the company is vying for a so-called master account that would allow state-chartered institutions to access the Fed's liquidity facilities, including payment services. Without a master account, banks are forced to operate through other institutions that hold a master account, which typically incurs high costs.