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Court denies Wyoming’s bid to join Custodia suit against Fed

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Court denies Wyoming’s bid to join Custodia suit against Fed


A federal judge in Wyoming denied the state’s bid to join a lawsuit by Custodia, a digital asset bank, against the Federal Reserve. The judge found that the state had no standing to join the suit, which challenges whether the Fed has discretion on to whom it grants a master account.

Bloomberg News

The state of Wyoming was blocked from joining a lawsuit challenging the Federal Reserve’s process for granting access to its payments systems.

Last week, Kelly Rankin, a judge in the U.S. District Court in Wyoming, denied the state’s motion to intervene in a suit filed by Custodia Bank, in which the Cheyenne, Wyoming-based digital asset bank is contesting the Fed’s handling of so-called master accounts.

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Rankin said the state had no standing in the case and that its presence would only further complicate the matter. He added that it would put an undue burden on the Fed as a defendant.

Wyoming had sought to join the suit on the grounds that the Fed’s decision to deny Custodia’s application for a master account — which serves as a single point of access to the central bank’s various financial services — undercuts the state’s special purpose depository institution, or SPDI, framework. 

The SPDI is the first state-level regulatory structure for banks focused on crypto-assets. Wyoming argued that by not allowing a bank chartered under this regime to access its payments services, the Fed has violated the principles of the country’s dual banking system, in which states can be chartered at both the state and national levels.

But, Rankin ruled that this argument is not material to Custodia’s main complaint, which challenges whether the Fed has the right to deny a legally chartered bank access to its payments system.

“This change is like going to a mechanic for an oil change, then being told you need to replace your rear-view camera,” Rankin wrote. “Two unrelated concepts with no relation to each other, yet still part of the same vehicle.”

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The ruling solidifies the fact that Custodia’s challenge, which has pushed the Fed deeper into the legal process than any other lawsuit in recent memory, has narrowed to a single argument: whether a provision of U.S. code that says the Fed “shall” make its services available to nonmember depository institutions entitles all banks to have master accounts.

When it first filed suit against the Fed last June, Custodia cited a host of arguments for why the central bank was in the wrong for its handling of its master account application. Some of those, including claims about violating the separation of powers doctrine and the Appointments Clause of the Constitution, were tossed out last November. 

In January, the Fed Board of Governors denied the bank’s bid to become a state member bank and the Reserve Bank of Kansas City rejected the bank’s master account application, nullifying Custodia’s arguments about an unreasonable delay. 

Custodia has since filed a new complaint, accusing the federal government of orchestrating a coordinated effort to deny it a master account in violation of the Monetary Control Act of 1980. 

The Fed maintains that it has full discretion to block applicants that present a risk to the stability of the banking system. In a March report on its decision to deny Custodia’s application, the central bank cited a litany of issues including a lack of deposit insurance, poor liquidity risk management practices and insufficient money laundering controls. It also highlighted risks associated with Custodia’s dependence on the “speculation and sentiment”-driven crypto sector.

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Reached for comment this week, Custodia spokesperson Nathan Miller said the court’s denial of Wyoming’s petition to intervene will have no bearing on the bank’s case against the Fed. He noted that the ruling states that Wyoming can still file amicus briefs in support of Custodia, as it did last September.

 “We appreciate the support shown by the State of Wyoming and believe that its views should be considered by the Court, whether as a party or as an amicus,” Miller said. “The Court’s decision has no impact on Custodia’s claims.”

The Fed declined to comment on this report. Wyoming Attorney General Bridget Hill did not respond to a request for comment. 



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Wyoming

Sturgis Rally Has Just Begun, But Bartenders Asking — Where Are The…

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Sturgis Rally Has Just Begun, But Bartenders Asking — Where Are The…


STURGIS, South Dakota — Dozens of motorcycles carrying American flags rolled down Main Street in Sturgis, South Dakota, on Friday signaling the start of the annual motorcycle rally.

The rolling procession was part of the 84th Sturgis Motorcycle Rally’s opening ceremony and parade. It also included a welcoming message from the mayor of Sturgis for the 500,000 attendees expected to pack the small Black Hills town over the next nine days.

A member of the military sang the national anthem, and a “blessing of the bikes” was held. With the patriotic pomp and prayer over, it was go time for one of America’s most raucous events.

The odd thing was, the event was over just after 4 p.m.

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Not 9 a.m. or 11 a.m. or even high noon, a time befitting of Sturgis’ Western heritage.

Why such a late start to the first day?

“They like to go riding in the morning when it’s cool,” speculated Cassey Weinhold, a bartender at One-Eyed Jack’s Saloon.

Maybe, but it’s also awfully convenient for those waking up late after imbibing a little too much on the eve of the rally, typically a big night for Sturgis bars.

The late-day start seems in-character for a city that published an entire webpage of drink recipes — like Jack’s Tennessee Honey Tea, Grape Sunrise and the Bacardi-infused Arctic Soda — on the official website for the city government.

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The rally also remains one of the few major public events in the country that allows open containers, albeit in a zone that stretches about eight blocks on both sides of Main Street. Drinkers must use a special events cups, and only wine and malt beverages are permitted inside them.

Get Them An IV — Stat

This year, Sturgis has at least two vendors offering intravenous fluids to help rehydrate rallygoers.

One of those was Hydration Station IV Lounge, tucked away in the Thunderdome, a cavernous, 38,000-square-foot entertainment center located about 13 miles east of Sturgis that holds concerts and other events during the festival.

On Friday, stunt drivers were peeling out and making tight donuts in the Thunderdome parking lot as part of a rally contest; their junk cars pumping smoke, bits of rubber and screeching loud noise into the 93-degree heat.

But inside the arena, two men relaxed in foldable reclining lawn chairs as if they were in an oasis. Needles jutted out of their arms and saline solution bags dripped fluids over their heads back into them.

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“When you’re dehydrated, you’re losing essential nutrients and minerals,” explained business owner Stacy Kenitzer.

It was the first year Kenitzer had opened a vendor booth at the rally. Her brick-and-mortar business is located in Rapid City, South Dakota, where she said she serves mostly people with medical conditions who have a hard time staying hydrated.

She also administers IVs for Rapid City Rush hockey players and rodeo participants, some of whom want to hydrate ahead of their events and others who desperately need to replenish fluids after.

Customers can choose a plain saline IV or one loaded with energy and vitality boosts that include vitamins C, B and magnesium, which helps prevent cramping, a symptom of dehydration.

Kenitzer, who is a registered nurse, said she believes her services would be in demand at Sturgis this year, primarily because so many riders are exposing themselves to 90-degree-plus rides this week.

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  • A motorcycle passes spectators on Main Street during the 84th Sturgis Motorcycle Rally’s opening ceremony and parade. (Justin George, Cowboy State Daily)
  • Stacy Kenitzer, 56, stands outside her booth for Hydration Station IV Lounge at the Sturgis Thunderdome.
    Stacy Kenitzer, 56, stands outside her booth for Hydration Station IV Lounge at the Sturgis Thunderdome. (Justin George, Cowboy State Daily)
  • It may not look it by the crowds of bikes lining the main drag in Sturgis, South Dakota, but locals say the first day of the 84th Sturgis Motorcycle Rally was a little slow.
    It may not look it by the crowds of bikes lining the main drag in Sturgis, South Dakota, but locals say the first day of the 84th Sturgis Motorcycle Rally was a little slow. (Justin George, Cowboy State Daily)
  • It may not look it by the crowds of bikes lining the main drag in Sturgis, South Dakota, but locals say the first day of the 84th Sturgis Motorcycle Rally was a little slow.
    It may not look it by the crowds of bikes lining the main drag in Sturgis, South Dakota, but locals say the first day of the 84th Sturgis Motorcycle Rally was a little slow. (Justin George, Cowboy State Daily)

Also Good For Hangovers

Kenitzer also recognizes that some of her clientele will likely be seeking help after rough nights.

Her goal was to serve 100 customers over the 10-day gathering. But by early afternoon Friday, she said she had only hooked IVs to four.

“One was really hungover,” she said. “The others were just dehydrated, overheated.”

A Slow Start

Some wondered why there seemed to be fewer people at the bars on the first day of the rally. Many of Main Street’s establishments that had opened during breakfast hours saw slower-than-normal business, bartenders told Cowboy State Daily.

Was it a case of an aging demographic? Boomers dominated the sidewalks Friday, but the rally has in recent years been getting younger.

The average age of attendees dropped from 53.1 years old in 2015 to 50.8 in 2022, according to a city survey.

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At the Oasis Bar and Fireside Lounge, waitress Keri Jones bemoaned the lack of customers by lunchtime. It was her second year working the rally, and to the inexperienced eye, she seemed busy, juggling multiple tables.

But she said she only had four tables to mind. On a good day, she would be waiting on an entire section.

“Oh, looks like he needs a drink,” she said, before running over to a pair sitting at a high top. “I’m telling you, this is not busy. This is dead.”

Jones, like others wasn’t discouraged. It was just Day One. Nine more days to go.

Perhaps much like the rally’s opening ceremony, rallygoers are just getting a late start.

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Justin George can be reached at justin@cowboystatedaily.com.



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Wyoming

This state ain’t big enough for the both of us: Wyoming’s Republican primary showdown

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This state ain’t big enough for the both of us: Wyoming’s Republican primary showdown


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Wyoming’s early voting is already in full swing for the Aug. 20 primary. In the famously conservative stronghold, where 86 of 93 seats in the state legislature are held by Republicans, the primaries are where the political map of the Cowboy State’s future is drawn.

With infighting in the state’s Republican Party mirroring national splits, we look at both sides of the GOP political gunfight: the Wyoming Freedom Caucus, part of the national State Freedom Caucus Network, and the more moderate Wyoming Caucus.

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More: Native representation in the Wyoming legislature rests on Ivan Posey’s shoulders

The boundaries around the different conservative camps are blurry—the Wyoming Caucus does not have an official member list, and the Freedom Caucus does not have any registered members in the state senate. But, over a dozen state senators consistently voted in line with the Freedom Caucus’ U.S. House members during the 2024 legislative session.

Advertisements across the board are rich with big belt buckles and even bigger landscapes, blue jeans, American flags, and calls to preserve the “Wyoming way of life.”

The 2024 state primaries will prove to be a defining moment for the Republican identity in Wyoming. The question remains: Will the momentum that led to Rep. Liz Cheney’s defeat in 2022 result in more Freedom Caucus members entering the state legislature, potentially shifting control? Or will the red wave recede, leaving the moderate Republicans in power but on shaky ground?

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Check out the Cowboy State’s regional and congressional races that USA TODAY is monitoring:

Cy Neff reports on Wyoming politics for USA TODAY. You can reach him at cneff@usatoday.com or on X, formerly known as Twitter, @CyNeffNews





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Who’s running for federal office in Wyoming? Who will be on the congressional ballot

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Who’s running for federal office in Wyoming? Who will be on the congressional ballot


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In less than three weeks, Wyoming voters will head to the polls on Aug. 20 for the state primary to determine the type of conservatism they prefer. On the ballot: the Cowboy State’s single U.S. House seat and one of its U.S. Senate seats.

The regular voter registration deadline is Monday, Aug. 5. Same-day registration is also available on primary day at the polling station.

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Who are the GOP candidates running for the U.S. House of Representatives?

Republican incumbent Rep. Harriet Hageman, 61, is a former attorney who unsuccessfully ran for the Wyoming governorship in 2018. Although not a registered member, she makes appearances at Wyoming Freedom Caucus rallies and has held hardline conservative positions on national issues, including her recent labeling of Kamala Harris as a “DEI hire.” The congresswoman was one of eleven members of the U.S.. House of Representatives who brought articles of impeachment against Homeland Security Secretary Alejandro Mayorkas. She also condemned the Biden administration’s new coal policies as anti-Wyoming and served on the House Judiciary Committee investigating the Biden family.

Steven Helling, a former pro-Trump Democrat who ran for the House seat, is now running as a Republican in the primary. He is focusing his campaign on opposing the Bill Gates-backed nuclear power plant that recently began construction in western Wyoming. Helling also supports pro-life policies and favors imposing term limits on the House, Senate, and Supreme Court.

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Which Republicans are running for U.S. Senate?

Incumbent Republican U.S. Sen. John Barrasso is running for his fourth term, having held the seat since 2007, and faces challenges from John Holtz, a former judge and lawyer, and Reid Rasner, who has worked as a financial advisor and a realtor.

Barrasso, a longtime figure in Wyoming politics, served in the state legislature from 2003 to 2007 and was an orthopedic surgeon before entering politics.

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Recently, the senator supported the Supreme Court’s Chevron and Trump legal immunity decisions while criticizing immigration policies and inflation under the Biden administration.

Reid Rasner drew controversy when he posted photos with Rep. Hageman, which her campaign felt implied an endorsement, and received a cease and desist letter in return. Among other issues, Rasner is campaigning that life begins at conception, support for the Second Amendment, and the enforcement of term limits in Congress.

John Holtz ran for a U.S. Senate seat in 2018 and 2020 but was unsuccessful. In a written statement to USA TODAY, Holtz listed his priorities as reducing the deficit, strengthening the country’s defense, making social security nontaxable, cutting social programs, and exporting resources to Europe and Israel through the Straits of Gibraltar to broaden our opportunities.

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Cy Neff reports on Wyoming politics for USA TODAY. You can reach him at cneff@usatoday.com or on X, formerly known as Twitter, @CyNeffNews





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