Reserve Dollar

Bank

Reserve

<ul>
 <li>Fed orders Customers Bancorp to overhaul risk management and AML practices amid crypto sector scrutiny. No fine was imposed.</li>  
 <li>Customers Bank must enhance due diligence and reporting to address identified deficiencies in digital asset operations.</li>  
 <li>Fed's enforcement highlights a growing focus on crypto compliance; banks must now improve risk management and staff expertise.</li> 
</ul>  
<p>The Federal Reserve of the US launched an enforcement action against <a href="https://www.reuters.com/business/finance/fed-announces-enforcement-action-against-customers-bancorp-risk-management-2024-08-08/" target="_blank" rel="noopener noreferrer nofollow">Customers Bancorp</a> and its subsidiary, Customers Bank. The decision was reached in response to a recent examination that has exposed weaknesses in the risk management and AML policies at the bank. Notably, these issues emerged within the bank’s digital assets business and its tokenized instant payments platform.</p>  
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
 <div class="wp-block-embed__wrapper">
  https://twitter.com/ReutersBiz/status/1821565818255085623
 </div>
</figure>  
<h3 class="wp-block-heading" id="h-mandated-overhaul-and-compliance-measures"><strong>Mandated Overhaul and Compliance Measures</strong></h3>  
<p>The bank's risk management for its <a href="https://cryptonewsland.com/ftxs-12-7-billion-payout-a-turning-point-for-cryptocurrency-regulation/" target="_blank" rel="noopener noreferrer nofollow">cryptocurrency business</a> has serious problems that the central bank has found. As a result, the Fed has ordered a thorough revision of the bank's risk management procedures. In order to effectively manage these risks, it also underlined the necessity of increased staff knowledge and resource allocation.</p>  
<p>The Fed's action also requires the bank to improve reporting of suspicious behavior and boost its customer due diligence. The goal of these steps is to strengthen the bank's capacity to identify and stop money laundering operations. The failure to comply with these requirements has triggered the Fed's decisive action.</p>  
<h3 class="wp-block-heading" id="h-broader-implications-for-crypto-regulation"><strong>Broader Implications for Crypto Regulation</strong></h3>  
<p>This enforcement underscores the growing scrutiny of financial institutions involved in digital asset businesses. Moreover, it highlights the regulatory focus on tightening controls and mitigating risks in the <a href="https://cryptonewsland.com/trump-pushes-for-u-s-commitment-to-cryptocurrency-in-a-livestream-interview/" target="_blank" rel="noopener noreferrer nofollow">cryptocurrency sector</a>. The Fed's decision reflects a broader trend towards stricter regulation of financial firms dealing with crypto assets.</p>  
<p>There is no financial penalty associated with the enforcement action. Rather, it mandates that Customers Bancorp rectify the found deficiencies and provide periodic updates to authorities regarding its advancement.</p>  
<p>The injunction specifically requires a revamp of its digital assets business's risk management procedures. The bank has to make sure that its employees are properly prepared and trained to manage any new risks that arise in this industry.</p>  
<p>The Fed further stated that Customers Bancorp has already begun taking action to address the shortcomings found during the investigation. This proactive approach shows a dedication to enhanced risk management and compliance.</p>  
<p>Regulations restricting banks' exposure to the cryptocurrency market have previously been released by the <a href="https://www.federalreserve.gov/newsevents/pressreleases/enforcement20240808a.htm/" target="_blank" rel="noopener noreferrer nofollow">Federal Reserve</a>, the Office of the Comptroller of the Currency, and Federal Deposit Insurance Corp. Last year, the Federal Reserve revamped its digital asset supervision program, focusing on the relationship between conventional banks and cryptocurrencies.</p> 
<p>The post <a href="https://cryptonewsland.com/fed-cracks-down-on-customers-bancorp-over-crypto-risk-management-failures/" rel="noopener noreferrer nofollow">Fed Cracks Down on Customers Bancorp Over Crypto Risk Management Failures</a> appeared first on <a href="https://cryptonewsland.com" rel="noopener noreferrer nofollow">Crypto News Land</a>.</p>

Fed Cracks Down on Customers Bancorp Over Crypto Risk Management Failures

Table of Contents

Crypto News Land

Other articles published on Aug 9, 2024

Analysts Explained! Bitcoin (BTC) Investors Should Follow This Level and These Events for an Incr...

WazirX Finally Doing This For Users After $230M Hack Freeze

Hong Kong virtual banks eye Web3 growth despite regulatory hurdles

Ripple Introduces Ripple USD Stablecoin

Robinhood Beats Wall Street with Meme Stocks and Crypto Gains

PlanB Alerts Bitcoin Investors

Join our free newsletter for daily crypto updates!