US Federal Reserve Hits Texas Bank With Cease and Desist Order Over Crypto Services

The US Federal Reserve has issued a cease and desist order to a Texas bank to stop its cryptocurrency-related activities, accusing it of violating several national laws.

The Federal Reserve, after opening an investigation into the company, found that United Texas Bank had “serious deficiencies” in its corporate governance, management and anti-money laundering (AML) protocols, according to recent court documents.

An investigation by the Federal Reserve found that the bank allegedly violated several laws regarding digital assets, including the Bank Secrecy Act and rules and regulations issued by the U.S. Treasury Department, as well as the Federal Reserve itself.

“The investigation revealed significant deficiencies related to foreign correspondent banking clients and virtual currencies, in particular in terms of risk management and compliance with applicable anti-money laundering laws, rules and regulations.”

To address the AML issue, the regulator ordered the bank to establish “a system of internal controls that is reasonably designed to ensure ongoing compliance with BSA/AML requirements,” managed by a qualified compliance officer who will have full autonomy and accountability.

The Fed also required the bank to submit an acceptable, revised customer due diligence program, as well as a written corporate governance program that outlined how the bank planned to address its structural, personnel and management issues.

However, the decision stated that the bank neither admitted nor denied committing any prohibited act.

“Without admitting or denying any allegations of unsafe and unfair banking practices or violations of applicable Texas law, the Bank consents to this order being deemed a consent order for purposes of Texas law.”

Last month, the Federal Reserve took enforcement action against Customers Bancorp, a Pennsylvania-based bank, on similar grounds.

Don’t miss a moment – subscribe to receive email updates straight to your inbox

Check out the price action

Follow us on XFacebook and Telegram

Surf Daily Hodl Mix

&nbsp

Disclaimer: The opinions expressed on The Daily Hodl do not constitute investment advice. Investors should conduct due diligence before making any risky investments in Bitcoin, cryptocurrency, or digital assets. Please note that your transfers and transactions are at your own risk and any losses incurred are your responsibility. The Daily Hodl does not recommend buying or selling any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Generated image: Midjourney