Excerpt from Bitcoin Article, Published on Aug 09, 2024.
The Federal Reserve has flagged significant deficiencies in Customers Bancorp’s Anti-Money Laundering (AML) compliance framework, citing critical concerns under the Bank Secrecy Act (BSA) and related regulations. Recent examinations by the Federal Reserve Bank of Philadelphia revealed substantial lapses in the bank’s compliance practices, including inadequate risk management and insufficient controls related to its digital asset strategy and dollar token activities.
The enforcement action mandates a series of corrective measures to bolster the bank’s oversight and operational compliance. This move has drawn reactions from the crypto community, with some viewing it as part of a broader crackdown on crypto-friendly institutions. Nic Carter, a prominent crypto proponent, remarked, “Customers was one of the biggest pro-crypto banks out there.”
In response, Customers Bancorp has agreed to a formal written agreement with the Federal Reserve, committing to enhance its board oversight and AML compliance program. The agreement outlines several critical steps the bank must take, including revising its risk management practices, improving customer due diligence processes, and enhancing its suspicious activity monitoring and reporting mechanisms.
Within 60 days, Customers Bancorp is required to submit detailed plans to the Federal Reserve to address the identified issues, with ongoing progress reports mandated to ensure compliance. This enforcement action comes amid increasing scrutiny of the crypto industry by the Biden administration, despite Vice President Kamala Harris’s purported pro-crypto stance.
Critics argue that this latest move may signal a concerted effort to curb the growth of digital assets, highlighting a potential agenda targeting crypto-friendly institutions. As Customers Bancorp works to rectify its AML compliance deficiencies, the broader implications for the banking sector and the future of digital assets remain to be seen.
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