U.S. Federal Reserve Slaps Texas Bank With Cease-and-Desist Order Related to Crypto Services

The US Federal Reserve has hit a financial institution in Texas with a crypto-related penalty for violating a number of nationwide legal guidelines.

In keeping with latest courtroom paperwork, the Federal Reserve discovered that United Texas Financial institution had “vital deficiencies” in its company oversight, governance and anti-money laundering (AML) protocols after launching an investigation into the corporate.

The Fed’s investigation discovered that the financial institution allegedly violated a number of legal guidelines when it got here to digital belongings, together with the Banks Secrecy Act and the foundations and rules of the U.S. Treasury Division and the Federal Reserve itself.

“The investigation revealed vital deficiencies referring to overseas correspondent banks and digital forex clients, significantly danger administration and compliance with relevant legal guidelines, guidelines and rules referring to cash laundering.”

To resolve the AML concern, the regulator directs the financial institution to determine a “system of inside controls moderately designed to make sure continued compliance with BSA/AML necessities,” managed by a certified compliance officer who would have full autonomy and accountability.

The Fed additionally requires the financial institution to submit a suitable revised buyer due diligence program, in addition to a written company governance program that outlines how the financial institution plans to deal with its structural, personnel and administration wants.

Nevertheless, the order states that the financial institution has neither admitted nor denied any wrongdoing.

“With out admitting or denying any allegations of unsafe and unsound banking practices or violations of relevant Texas legislation, the Financial institution agrees to deal with this order as a consent order throughout the that means of Texas legislation.”

Final month, the Federal Reserve issued an enforcement motion in opposition to Clients Bancorp, a Pennsylvania-based financial institution, for comparable causes.

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