Fed Asks Crypto-Friendly Bank Customers Bank to Limit Crypto Customer Risk

On August 9th, according to CoinDesk, the Federal Reserve took enforcement action against the crypto-friendly Customers Bank, stating that it failed to properly manage the risks of its crypto customers. In an enforcement agreement signed by Customers Bank executives, the Federal Reserve pointed out "significant deficiencies" in the bank's risk management practices and compliance with applicable anti-money laundering laws, regulations, and rules. Under the order, Customers Bank must promptly provide the Federal Reserve with a series of written plans and new compliance methods, including an agreement to "ensure the bank collects, analyzes, and retains complete and accurate information for all customers." The bank must also give the Federal Reserve 30 days' advance notice of "any new strategic initiatives, products, services, or relationships with third parties related to its digital asset strategy." Customers Bank's clients reportedly include well-known crypto companies such as Galaxy Digital, Coinbase, and Circle. It was previously reported that US banking regulators, including the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation, have issued guidance aimed at limiting banks' exposure to the crypto industry.