A U.S. crypto industry group is urging the Supreme Court to take up a dispute between Custodia Bank and the Federal Reserve over access to the central bank’s payment system, arguing that federal law limits how broadly the Fed can refuse eligible banks.

In an amicus brief filed Wednesday, the Blockchain Association said the Fed should not have wide discretion to deny payment services to state-chartered banks that meet eligibility requirements. The group also framed Custodia’s case as part of a broader pattern of resistance to crypto banking—referencing regulatory pressure it links to the “Operation Choke Point 2.0” narrative.

Key takeaways

• The Blockchain Association filed an amicus brief supporting Custodia Bank’s petition to the U.S. Supreme Court over Fed master account access.
• The group argues the Federal Reserve should not be able to effectively override eligibility for payment services through broad discretion.
• Custodia’s application for a master account was rejected by the Federal Reserve Bank of Kansas City, and a Tenth Circuit ruling left the Supreme Court as the last option.
• The dispute is unfolding as some crypto firms have obtained federal banking structures and, in limited cases, direct access to Fedwire.

Why Custodia is looking to the Supreme Court

Custodia Bank, a Wyoming-chartered institution focused on digital assets, applied for a Federal Reserve master account in 2020. Such an account is designed to give qualifying banks direct access to payment system services, reducing reliance on intermediary institutions for transfers.

The Federal Reserve Bank of Kansas City denied Custodia’s request in 2023. After that denial, the case moved to the Tenth Circuit Court of Appeals, which ultimately ruled that the regional Fed bank had discretion to reject the application.

Earlier this year, the Tenth Circuit voted 7-3 against rehearing the dispute in March. With the appeals court effectively closing the door, Custodia’s petition to the Supreme Court became its remaining path for review.

The Blockchain Association’s legal argument

The Blockchain Association’s amicus brief argues that the lower court gave the Fed too much leeway in how it interprets its authority. The group contends that federal law requires the Federal Reserve to make its payment services available to eligible nonmember banks.

In the association’s view, the Tenth Circuit’s reasoning risks granting the Fed a de facto veto over state-chartered banks by allowing the central bank to withhold the operational access these institutions would need to function independently.

The filing also connects Custodia’s situation to claims about regulatory discouragement of crypto-related banking activity. Specifically, it links the case to concerns raised under the “Operation Choke Point 2.0” theme, which has been used in parts of the industry to describe alleged pressure that makes it harder for banks to serve digital asset clients.

Notably, the brief’s central emphasis is legal and structural: whether the Fed’s discretion in granting access should be narrowly constrained when a bank meets eligibility requirements.

Access to Fed payment rails is becoming more common—though unevenly

Custodia’s dispute comes at a time when some crypto businesses are making headway into the U.S. banking system through federal licensing, and in certain circumstances, direct links to Federal Reserve infrastructure.

For example, in March, Kraken Financial—an entity tied to the Kraken ecosystem—became the first crypto banking unit to receive a limited-purpose master account from the Federal Reserve Bank of Kansas City. That approval provided direct access to Fedwire. The development stood in contrast to Custodia’s earlier rejection by the same regional Fed bank, highlighting that the legal questions at the heart of Custodia’s case remain highly consequential for other banks pursuing similar access.

Meanwhile, Coinbase has moved through federal chartering pathways tied to custody and trust activities. In April, the company received conditional approval from the Office of the Comptroller of the Currency (OCC) to establish a national trust company, a structure that would bring custody services under federal oversight without allowing retail deposits or operation as a commercial bank. Circle later obtained final OCC approval for a national trust bank in July, and Kraken parent Payward applied for its own national trust company charter the following month.

The OCC has also conditionally approved national trust bank applications for several other crypto-adjacent firms, including Ripple, BitGo, Fidelity Digital Assets, and Paxos in December.

Industry pushback from traditional banking groups

As crypto firms seek federal charters and deeper banking integration, traditional banking associations have argued that these entities can gain benefits associated with bank status without accepting the full set of regulatory obligations applied to conventional retail banks.

In April, the Independent Community Bankers of America opposed Coinbase’s conditional OCC approval for a national trust company, arguing that crypto companies are pursuing the advantages of bank charters while avoiding certain burdens of the traditional banking framework.

This tension underscores a broader theme: even as regulators have created pathways for crypto-related institutions to operate under federal supervision, access to the most central components of the payment system—such as Fed master accounts—still appears to be a contested boundary.

For investors and operators, the Supreme Court decision will matter less as a symbolic victory and more as a potential clarification of how far the Fed can go when determining payment-system access for eligible banks. Until the Court acts, it remains uncertain whether Custodia’s case will reshape the Fed’s discretion or further cement the limits of judicial review over payment rail eligibility decisions.

A security incident at a Trezor shipping provider exposed personal details belonging to 13,689 customers.

The breach affected customers across seven countries, while Trezor confirmed that its wallet systems and devices remain secure.

However, the company warned that exposed details could increase phishing attempts targeting affected users.

Shipping Provider Incident Led to Data Exposure

The incident began after ShipMonk, a shipping provider used by Trezor, suffered unauthorized access to its systems.

As a result, attackers accessed customer information linked to hardware wallet orders processed through the provider.

The exposed information includes names, email addresses, phone numbers, and shipping addresses for some affected customers.

Trezor identified 11,742 customers whose information received full exposure during the incident. Those records included customer names, email addresses, phone numbers, and shipping addresses linked to their orders.

Meanwhile, another 1,947 customers faced partial exposure involving their names, cities, and email addresses.

The affected customers received orders in the United States, the United Kingdom, Sweden, Colombia, Brazil, Italy, or Portugal. Trezor said those orders fell within the 90 days before August 8, 2026, when the incident came to light.

Furthermore, the company contacted affected customers through its official email channel and advised them to remain alert.

Trezor Warns Customers About Phishing Threats

Although the breach exposed personal information, Trezor said attackers did not compromise its internal systems.

The company also confirmed that its hardware wallets remain secure and that customer funds remain protected by wallet security.

Therefore, the incident primarily creates a social engineering risk rather than a direct device security threat.

However, leaked contact and shipping information could help criminals create more convincing phishing messages.

Attackers could combine customer names, addresses, and emails to make fraudulent messages appear linked to Trezor orders. Consequently, affected users could face attempts to obtain wallet credentials, recovery phrases, or other sensitive information.

Trezor customers should therefore avoid links from unexpected messages and verify communications through official channels.

Users should also never provide recovery phrases, because legitimate wallet providers do not require those details.

In addition, customers should treat unexpected calls, emails, and messages as potential attempts to steal wallet access.

Trezor Develops Anonymous Delivery Option

The breach has also pushed Trezor to develop a new Anonymous Delivery option for future customers.

The company plans to introduce the service in the European Union by September and in the United States later.

This approach aims to reduce the personal information connected with hardware wallet purchases and deliveries.

The planned option could allow customers to use nicknames or label identification instead of real names.

It could also support automated parcel lockers, which would reduce the need to provide home delivery addresses.

Furthermore, Trezor plans to offer unbranded packaging with generic sender information for additional privacy.

The move highlights the security challenges that crypto companies face beyond their own technology and wallets.

Shipping partners can hold valuable customer information, which makes third-party data protection important for hardware wallet users.

As Trezor responds to the incident, stronger delivery privacy could help reduce similar exposure in future orders.

The incident also follows a separate Coldcard security incident that raised concerns across the crypto self-custody sector.

Galaxy Research estimated that users lost as much as $116 million in Bitcoin during that incident.

Together, the events highlight how personal data and wallet security can create different risks for crypto users.

Ethereum Foundation researcher Justin Drake has said the network’s layer 1 will leave Poseidon after an eight-year, eight-figure research effort and pursue established hash functions such as SHA-2 or BLAKE2s.

Ethereum L1 turns away from Poseidon

Justin Drake said in an Aug. 13 X post that the Ethereum Foundation is abandoning Poseidon for its L1 roadmap and moving toward traditional options such as SHA or BLAKE.

“Goodbye, Poseidon!” Drake wrote, describing the decision as the result of an “8-year, 8-figure rabbit hole” in post-quantum cryptography.

Poseidon emerged in 2019 as a hash function designed for zero-knowledge proof systems. Its structure made it less costly to process inside Succinct Non-Interactive Arguments of Knowledge, commonly known as SNARKs, than traditional hash functions built around binary operations.

Since 2018, the Ethereum Foundation has invested in specialized hashes as part of its work on zero-knowledge technology. Poseidon later became a common choice across zk-rollups and zkVMs, including systems that secure billions of dollars in crypto assets.

Drake’s announcement concerns Ethereum’s future L1 architecture, rather than an immediate removal of Poseidon from existing applications. Rollups, virtual machines, and other projects that already use the function are not required to replace it because of the roadmap decision.

Advances in proof-system design have now changed the trade-off that initially favored Poseidon. According to Drake, established functions such as SHA-2 and BLAKE2s can match its performance when paired with SNARKs designed around binary computation.

“In hindsight the key was not SNARK-friendly hashes, but hash-friendly SNARKs.”

Binary-field SNARKs make traditional hashes practical

Binary fields allow proof systems to process the Boolean logic used by standard hash functions more naturally. Earlier SNARK designs often relied on large prime fields, where bit-based operations such as XOR could be costly to represent.

Working over the smallest prime number, two, allows binary-field systems to align their calculations with the zeros and ones used in conventional computing. Drake said the resulting designs can prove about 1 million traditional hash calls per second on a laptop, with an overhead of roughly 100 times compared with native CPU execution.

Research projects including Binius and Flock contributed to the performance gains, according to the post. Binius applies binary-field arithmetic to zero-knowledge proofs, while Flock focuses on proving large batches of Boolean calculations, including computations involving SHA-256, Keccak, and BLAKE3.

Drake also pointed to SNARK.fast, an open automated research project that uses artificial intelligence to improve proving code. Its strongest result reached 1.8 million BLAKE3 compressions per second, representing a 255% improvement over its starting benchmark.

Using established hashes could reduce Ethereum’s reliance on specialized cryptographic functions that require years of separate analysis. SHA and BLAKE have already received extensive study outside zero-knowledge systems, although their implementation inside Ethereum would still require research, audits and testing.

The decision also changes the relationship between Ethereum’s hash functions and its proof infrastructure. Instead of designing a new hash around the limits of a SNARK, researchers can build the SNARK around hash functions that already have long security records.

Ethereum post-quantum work favors hash-based signatures

Drake linked the decision to Ethereum’s post-quantum security program, which is preparing the protocol for computers capable of breaking elliptic-curve cryptography. Ethereum currently relies on such systems for user accounts and parts of its consensus and data infrastructure.

As crypto.news reported in August, co-founder Vitalik Buterin has moved quantum security higher in Ethereum’s updated roadmap. The plan also covers native privacy, formal verification, post-quantum scaling, and possible replacements for parts of the Ethereum Virtual Machine.

Drake said recent advances in AI-assisted cryptanalysis have created setbacks for more complex post-quantum systems. He specifically cited HAWK, a lattice-based signature design, and SQIsign, which relies on isogeny-based cryptography.

According to his assessment, the problems strengthen the case for hash-based signatures on blockchains. Such designs use relatively simple and extensively studied assumptions, although individual signatures can be too large for direct use at Ethereum’s present scale.

SNARK aggregation offers one way to address the size problem. A proof system can verify many hash-based signatures and compress the result into one smaller proof for the network, rather than requiring every signature to be placed and checked separately.

The same method could support multisignature arrangements and k-of-n threshold signatures, in which a transaction needs approval from a set number of participants. Drake said the flexibility comes from using the SNARK to prove the authorization rules without placing all the underlying signature data onchain.

Wallet-level preparations are already being tested. In June, an Ethereum researcher demonstrated account protection using a SPHINCS-based signature verifier, with one optimized version requiring about 127,000 gas and carrying a 3,704-byte signature. The researcher estimated the verification cost at roughly $0.07 per account at the time.

U.S. standards add pressure for early preparation

For U.S. investors and businesses using Ethereum, the roadmap addresses a security risk that federal standards agencies have already begun treating as a migration issue. The National Institute of Standards and Technology finalized its first three post-quantum cryptography standards in August 2024 and encouraged system administrators to begin integrating them.

NIST’s standards do not direct Ethereum’s protocol choices, and the agency’s selected algorithms do not make the network quantum-safe by themselves. Its migration work shows, however, that American institutions are preparing before cryptographically relevant quantum computers become available.

A Coinbase independent advisory board reached a similar position in a 50-page paper published in April. Its members included Drake, Stanford cryptographer Dan Boneh, EigenLayer founder Sreeram Kannan, Coinbase cryptography head Yehuda Lindell, and distributed-systems researcher Dahlia Malkhi.

The board concluded that current blockchains remain secure from quantum attacks but warned that replacing vulnerable signatures across networks, wallets, and exchanges could take years. According to the advisory paper, some quantum-resistant alternatives could increase blockchain data requirements by as much as 38 times.

Ethereum’s use of proof aggregation is intended to limit such costs while replacing vulnerable cryptography. Drake said hash-based SNARKs could compress an arbitrary number of post-quantum signatures into a compact proof suitable for inclusion in a block.

LeanVM targets production deployment in 2027

The Ethereum Foundation’s post-quantum team is working on binary-field infrastructure as part of leanVM, a minimal zero-knowledge virtual machine intended to verify and aggregate cryptographic proofs.

Drake said the current schedule calls for a production-grade leanVM in 2027. Deployments involving Ethereum’s consensus, data, and execution layers are planned for 2028, though each protocol change will still require implementation, testing, and agreement among Ethereum’s independent development teams.

The schedule sits within Ethereum’s Strawmap, a technical coordination document extending through 2029 rather than a finalized activation calendar. Earlier Strawmap coverage described seven proposed forks covering faster slots, shorter finality, post-quantum cryptography, privacy, and higher network capacity.

Ethereum’s post-quantum team is now working with Binius, Flock, and related binary-field systems while developing leanVM benchmarks. Drake said the planned 2028 work would apply the resulting proof technology separately across the consensus layer, data layer, and execution layer.

On Aug. 12, the luckiest 15 million people in the world were those living in a narrow band measuring approximately 5,100 miles long and 180 miles wide, stretching from northern Russia, down through Greenland, then Iceland, then Spain, then a tiny nip of Portugal, before passing into the Mediterranean Sea. That strip represented the path of totality for the recent total solar eclipse—the first visible from Europe in 27 years.

The eclipse did not take long to play out, lasting just 4.4 hours before it at last extinguished its fires in the Mediterranean waters. But it made an enduring impression—and will continue to, thanks to the uncounted astronomers and lay folk who photographed the event with ordinary cameras, great observatories, and even a NASA chase plane. Here is just a sampling of the work these eclipse-watchers produced.

It was only later that I realized how rare such an event had become, where I spoke to somebody with a very different education profile, occupation, and interests from mine. This made me consider what would have happened if, on my other side at the bar, there had been somebody with a Ph.D. and an occupation similar to mine (academic, financier, consultant, lawyer, etc.). Whom would I have chosen to initiate a conversation with? Whom would the participants in the workshop I attended have chosen? The answer seemed almost too obvious, and not completely unrelated to why the plight of manual workers was less than top of mind for many college-educated policymakers, activists, and civil servants.

I later embellished the choice a little and offered it to several friends and participants at various conferences: If stranded at an airport, with a professional with a Ph.D. from a faraway land (China, India, Brazil, Nigeria) on one side and an American high school graduate on the other, to whom would you look forward to talking for the next hour? Many took the question to be rhetorical, because the answer was, again, too obvious.

Robinhood’s partnership with Uniswap is helping the brokerage rapidly build liquidity on its new blockchain, potentially removing a key obstacle to attracting users and assets, according to Standard Chartered.

In a recent note, Standard Chartered analyst Geoffrey Kendrick said Robinhood Chain has grown to nearly $1 billion in total value locked (TVL), which he described as the fastest growth of any blockchain by that measure. Virtually all of Robinhood Chain’s liquidity needs are being met through Uniswap V2, V3 and V4, Kendrick said.

The arrangement gives Robinhood access to established decentralized finance infrastructure as it scales its blockchain, potentially strengthening its ability to attract users without having to build liquidity from scratch.

The partnership is also having a significant impact on Uniswap’s token economics. According to Standard Chartered, protocol fees generated through Robinhood are now the largest source of UNI token burns.

The UNI burn rate has roughly doubled since a Robinhood-linked fee switch was activated on July 27, reaching an annualized pace of about $90 million. At UNI’s current price of roughly $3.50 apiece, that would translate to 25 million UNI tokens, or just over 4% of the circulating supply, being burned annually.

Robinhood Chain’s liquidity sources. Source: Standard Chartered

Robinhood Chain launched on July 1 with a focus on bringing real-world assets onchain. Adoption accelerated quickly after launch, reaching 194,000 daily active users during its first week.

Related: Robinhood Chain sees over $70M in ETH bridged during first week

Robinhood’s crypto push expands into tokenization and prediction markets

Robinhood Chain is part of the brokerage’s broader push beyond traditional stock trading, with the company expanding into crypto, prediction markets and tokenization. The strategy has drawn attention from Wall Street, with analysts at Bernstein raising their price target for Robinhood (HOOD) stock to $160 per share and identifying tokenization and prediction markets as key growth drivers.

HOOD shares were up more than 4% on Thursday, extending six-month gains to almost 30%. Source: Yahoo Finance.

The expansion has coincided with mixed trends across Robinhood’s crypto business. The company reported record revenue and earnings in the second quarter, even as crypto trading volumes and revenues declined. 

Related: Robinhood in talks with Crypto.com over prediction markets: WSJ

The Blockchain Association urged the US Supreme Court to hear Custodia Bank’s challenge to the Federal Reserve’s denial of its application for a master account, which would give the crypto-focused bank direct access to the Fed’s payment system.

In an amicus brief filed Wednesday, the industry group argued that federal law requires the central bank to make its payment services available to eligible nonmember banks and that the Fed should not have broad discretion to deny access.

The association said the appeals court’s decision effectively gives the Fed veto power over state-chartered banks by allowing it to withhold services needed to operate independently. It also linked Custodia’s case to alleged crypto debanking under “Operation Choke Point 2.0,” arguing that federal regulators discouraged banks from serving the digital asset industry.

Custodia, a Wyoming-chartered bank focused on digital assets, applied for a Fed master account in 2020, seeking direct access to the central bank’s payment services without relying on an intermediary bank.

The Federal Reserve Bank of Kansas City denied Custodia’s application in 2023, and the Tenth Circuit Court of Appeals later ruled that the regional Fed bank had discretion to reject its request. In March, the appeals court voted 7-3 against rehearing the case, leaving the Supreme Court as Custodia’s only remaining avenue for review.

The Blockchain Association said the Tenth Circuit interpreted the Fed’s authority too broadly, potentially allowing it to deny payment-system access to eligible state-chartered banks serving the crypto industry.

Blockchain Association backs Custodia’s Supreme Court petition. Source: US Supreme Court filing

Related: Goldman Sachs CEO backs ‘not perfect’ CLARITY Act as vote expected soon

Crypto companies push deeper into US banking

Custodia’s challenge comes as other crypto companies are gaining greater access to the US banking system, including federal charters and, in one case, direct access to Federal Reserve payment rails.

In March, Kraken Financial became the first crypto banking unit to receive a limited-purpose master account from the Federal Reserve Bank of Kansas City, giving it direct access to Fedwire. The approval contrasts with Custodia’s rejection by the same regional Fed bank in 2023.

In April, Coinbase received conditional approval from the Office of the Comptroller of the Currency (OCC) to establish a national trust company, bringing its custody business under federal oversight without allowing it to take retail deposits or operate as a commercial bank.

Circle received final OCC approval for its national trust bank in July, while Kraken parent Payward applied for its own national trust company charter the following month. The OCC also conditionally approved national trust bank applications from Ripple, BitGo, Fidelity Digital Assets and Paxos in December.

The trend has drawn resistance from traditional banking groups. The Independent Community Bankers of America opposed Coinbase’s approval in April, arguing that crypto companies are seeking the benefits of bank charters without being subject to the full regulatory framework applied to traditional banks.

Magazine: Bitcoin will never fall below $60K again: Nansen founder

What exactly does the lawsuit say?