Customers Bancorp operates a 24/7 DLT-based payment system, Customers Bank Instant Token (CBIT), which is used by many companies in the digital asset sector, including Galaxy Digital, Coinbase, Circle, Gemini and Kraken. Yesterday the U.S. Federal Reserve issued an enforcement action against the bank relating to weak risk management and anti-money laundering processes in its digital asset activities. The central bank didn’t impose a fine and said that Customers has already started to address the AML issues.
Within 60 days the bank has to submit plans to the Federal Reserve regarding improving its risk management practices for its digital asset strategy and a revised compliance program for Bank Secrecy Act and AML requirements.
Banks that serve the digital asset sector attract a lot of regulator attention. Last year Silvergate Bank shuttered voluntarily in an orderly fashion after it survived mass withdrawals following the crypto crash. Signature Bank was also popular with the digital asset sector, but far more diversified. It was amongst the banks that failed during March last year.
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