Kamala's Crypto Reset: Still Loading… Please Wait

The Federal Reserve’s action highlights critical concerns regarding Customers Bancorp’s handling of AML requirements

The U.S. Federal Reserve Board has levied “significant deficiencies” against Customers Bancorp, Inc. for its management of risk and adherence to anti-money laundering (AML) regulations in an enforcement action that was filed on Thursday.

The Federal Reserve branch in Philadelphia conducted examinations that uncovered substantial lapses in the bank’s compliance framework, the enforcement action details. These include the bank’s handling of AML requirements under the Bank Secrecy Act (BSA) and related regulations, especially in regard to its digital asset strategy and dollar token activities.

The action highlights critical concerns with the bank’s risk management practices and the handling of its digital asset strategy and dollar token activities, which have prompted the Fed to mandate corrective measures.

When the news broke, several crypto proponents insisted it was just another measure of attacking the crypto industry. “Customers was one of the biggest pro crypto banks out there,” Nic Carter said on Thursday.

“Fed and FDIC are systematically dismantling all crypto-friendly banks one after the next,” the crypto advocate added.

In response to the findings, Customers Bancorp has agreed to a formal written agreement with the central bank to enhance its board oversight and AML compliance program. The agreement outlines several critical steps the bank must take.

These include revising its risk management practices, improving its customer due diligence processes, and enhancing its suspicious activity monitoring and reporting mechanisms.

The bank is also required to submit detailed plans to the Federal Reserve within 60 days to address the identified issues, with ongoing progress reports mandated to ensure compliance.

Despite Kamala Harris’s so-called pro-crypto stance, the Biden administration’s scrutiny of the crypto industry appears to be intensifying, as seen in the Fed’s latest enforcement action against Customers Bancorp.

With critics pointing to a broader agenda targeting crypto-friendly institutions, this latest move may signal a concerted effort to curb the growth of digital assets, regardless of the broader implications for the banking sector.

“How’s the Kamala reset going?” Carter quipped sarcastically in his X thread.

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