The U.S. Federal Reserve is hitting a Texas bank with a crypto-related cease and desist order, alleging that it violated several national laws.
According to recent court documents, the Federal Reserve found that United Texas Bank had “significant deficiencies” in its corporate oversight, governance, and anti-money laundering (AML) protocols after launching an investigation into the firm.
The Fed’s probe uncovered that the bank allegedly violated several laws when it came to digital assets, including the Banks Secrecy Act and the rules and regulations set forth by the U.S. Department of the Treasury as well as the Federal Reserve itself.
“The examination identified significant deficiencies related to foreign correspondent banking and virtual currency customers, specifically risk management and compliance with applicable laws, rules, and regulations relating to anti-money laundering.”
To fix the AML issue, the regulator is mandating the bank create a “a system of internal controls reasonably designed to ensure ongoing compliance with the BSA/AML requirements” that is managed by a qualified compliance officer who would have full autonomy and responsibility.
The Fed is also requiring the bank to submit an acceptable revised customer due diligence program as well as a written corporate governance program that would outline how the bank plans to solve its structural, staffing, and management needs.
However, the order mentions the bank did not admit or deny any wrongdoing.
“Without admitting or denying any charges of unsafe and unsound banking practices, or violation of applicable Texas law, the Bank consents to deeming this Order to be a consent order for the purposes of Texas law.”
Last month, the Federal Reserve issued an enforcement action against Customers Bancorp, a Pennsylvania-based bank, for similar reasons.
The U.S. Federal Reserve is hitting a Texas bank with a crypto-related cease and desist order, alleging that it violated several national laws.
According to recent court documents, the Federal Reserve found that United Texas Bank had “significant deficiencies” in its corporate oversight, governance, and anti-money laundering (AML) protocols after launching an investigation into the firm.
The Fed’s probe uncovered that the bank allegedly violated several laws when it came to digital assets, including the Banks Secrecy Act and the rules and regulations set forth by the U.S. Department of the Treasury as well as the Federal Reserve itself.
“The examination identified significant deficiencies related to foreign correspondent banking and virtual currency customers, specifically risk management and compliance with applicable laws, rules, and regulations relating to anti-money laundering.”
To fix the AML issue, the regulator is mandating the bank create a “a system of internal controls reasonably designed to ensure ongoing compliance with the BSA/AML requirements” that is managed by a qualified compliance officer who would have full autonomy and responsibility.
The Fed is also requiring the bank to submit an acceptable revised customer due diligence program as well as a written corporate governance program that would outline how the bank plans to solve its structural, staffing, and management needs.
However, the order mentions the bank did not admit or deny any wrongdoing.
“Without admitting or denying any charges of unsafe and unsound banking practices, or violation of applicable Texas law, the Bank consents to deeming this Order to be a consent order for the purposes of Texas law.”
Last month, the Federal Reserve issued an enforcement action against Customers Bancorp, a Pennsylvania-based bank, for similar reasons.
