The U.S. Federal Reserve Board says it found “significant deficiencies” in Customers Bancorp, Inc.'s risk management and compliance with anti-money laundering laws in an enforcement action filed on Thursday.
The bank, which offers services to digital asset customers, agreed to file a written plan to the Federal Reserve to bolster “board oversight” of its anti-money laundering requirements and sanctions-related rules.
The bank also agreed to file a plan to improve its risk management practices regarding its “digital asset strategy,” according to the agreement. That includes “measures to ensure that the individuals or groups charged with the responsibility for the Organization's digital asset strategy possess the appropriate subject matter expertise, stature, independence, and authority; have clearly defined roles and responsibilities; and are allocated adequate resources and staffing,” the Federal Reserve said.
The central bank also asked Customers Bancorp to submit an amended customer due diligence program, which it says should include documents to verify customers' identities and “identify customers who pose a heightened risk of conducting potentially illicit activities at or through the Bank.”
Customers Bank, which is owned by Customers Bancorp, did not immediately respond to a request for comment.
Some in the crypto industry accused the Fed on Thursday of implementing “Chokepoint 2.0,” a term used by some to speculate about the possibility of a broader, coordinated crackdown.
“Chokepoint 2.0 is Still White House Policy,” said Matthew Sigel, head of digital asset research at VanEck, in a post on X. “$CUBI Has Been Among the Most Aggressive in Banking Crypto Funds & Projects. Now Hit With Enforcement Action.”
Nic Carter, founding partner at Castle Island Ventures, accused the Federal Reserve of taking apart crypto-friendly banks.
“Fed and FDIC are systematically dismantling all crypto-friendly banks one after the next,” Carter said in a post on X.
Update: Aug. 8, 4:25 p.m. UTC to include comments on X
