The US Federal Reserve has hit a bank in Texas with a crypto-related penalty for violating several national laws.
According to recent court documents, the Federal Reserve found that United Texas Bank had “significant deficiencies” in its corporate oversight, governance and anti-money laundering (AML) protocols after launching an investigation into the company.
The Fed’s investigation found that the bank allegedly violated several laws when it came to digital assets, including the Banks Secrecy Act and the rules and regulations of the U.S. Treasury Department and the Federal Reserve itself.
“The investigation revealed significant deficiencies relating to foreign correspondent banks and virtual currency customers, particularly risk management and compliance with applicable laws, rules and regulations relating to money laundering.”
To resolve the AML issue, the regulator directs the bank to establish a “system of internal controls reasonably designed to ensure continued compliance with BSA/AML requirements,” managed by a qualified compliance officer who would have full autonomy and responsibility.
The Fed also requires the bank to submit an acceptable revised customer due diligence program, as well as a written corporate governance program that outlines how the bank plans to address its structural, personnel and management needs.
However, the order states that the bank has neither admitted nor denied any wrongdoing.
“Without admitting or denying any allegations of unsafe and unsound banking practices or violations of applicable Texas law, the Bank agrees to treat this order as a consent order within the meaning of Texas law.”
Last month, the Federal Reserve issued an enforcement action against Customers Bancorp, a Pennsylvania-based bank, for similar reasons.
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