Federal Reserve Takes Action Against CryptoSupportive Customer Bancorp
The strict oversight and compliance measures imposed by the Federal Reserve on Customers Bancorp, Inc. and its subsidiary, Customers Bank, have garnered attention in the crypto community. The Federal Reserve Bank of Philadelphia conducted an examination that revealed significant deficiencies in the bank’s risk management and compliance practices, specifically in relation to anti-money laundering laws and the Bank Secrecy Act.
This development has raised concerns among crypto enthusiasts, as they believe that the Fed and FDIC are systematically dismantling crypto-friendly banks. Nic Carter, an author on X, expressed his worry about the news, stating that Customers Bank was one of the leading pro-crypto banks in the industry.
The Federal Reserve asserts that the bank’s board of directors should strengthen their oversight and allocate more resources to manage these high-risk activities. The scrutiny primarily focuses on the bank’s digital asset strategy and instant payments platform.
The crypto community has expressed outrage over this announcement, accusing the Federal Reserve and FDIC of gradually suffocating crypto businesses.
In accordance with the agreement between the Fed and Customers Bancorp, both entities must submit detailed plans within 60 days to address the identified deficiencies. These plans should outline steps to enhance board oversight, improve risk management, and ensure compliance with requirements and Office of Foreign Assets Control regulations.
Furthermore, the bank is required to revise its customer due diligence and suspicious activity monitoring programs. The agreement also mandates regular progress reports to ensure adherence to the newly established compliance measures.
Customers Bancorp and Customers Bank have agreed to these terms as a demonstration of their commitment to improving their compliance posture and instilling regulatory confidence.
In other news, Mox Bank, a digital bank incubated by Standard Chartered, has recently introduced crypto ETFs for retail investors. This move highlights the increasing integration of cryptocurrencies into traditional banking systems.
