Crypto-Friendly Customers Bank Sanctioned by Fed For Anti Money Laundering Deficiencies

Key Points:

• The Federal Reserve has sanctioned crypto-friendly Customers Bank for serious risk management and anti-money laundering deficiencies.
• The Fed demands improved risk management and due diligence practices, with ongoing regulatory updates.

According to Bloomberg, the Federal Reserve Board has issued the following enforcement action with respect to the giant weaknesses at the bank in risk management and money laundering practices against Customers Bancorp and its subsidiary, Customers Bank.

Read more: Customers Bank Now Emerges As Favorite Banking Partner For US Crypto Industry

Federal Reserve Actions Against Customers Bancorp on Risk Management Weakness

The Fed’s order requires crypto-friendly Customers Bank to submit a written plan to remediate deficiencies in its risk management, particularly as it pertains to its digital-asset activities. The bank must also update its procedures for due diligence on customers. Customers Bank has a payment platform that operates 24/7 for its clients who are dealing with cryptocurrencies.

The enforcement action came following a recent Federal Reserve examination at the Pennsylvania-based bank. Even though the action does not levy a monetary penalty on the bank, it makes detailing of major policy overhauls and compels the bank to report back to the regulators at regular intervals.

The order from the Fed is regarding enhancing the bank’s practices of risk management for the digital assets business. This includes making sure employees are well versed and resourced while moving quickly to deal with any emerging risks.

Crypto-Friendly Customers Bank Remains Stable Amidst Sector Turmoil

Crypto-friendly Customers Bank, a notable player in the digital asset space, has forged partnerships with numerous cryptocurrency firms, including major exchanges, market makers, and stablecoin issuers.

The bank gained prominence in the crypto industry, particularly after other crypto-friendly banks like Silvergate Capital and Signature Bank failed last year. Its resilience was further highlighted when it remained unaffected by the collapse of Sam Bankman-Fried’s FTX exchange in 2022.