Fed Hits United Texas Bank with Cease-and-Desist Order for Serving 'Virtual Currency Customers'
The Fed issued a cease-and-desist order to United Texas Bank last Wednesday for "significant deficiencies" in adhering to anti-money laundering laws, especially in dealings with cryptocurrency customers.
- The Texas bank has previously collaborated with firms like the Stellar Foundation and Circle's USDC.
"The Examination identified significant deficiencies related to foreign correspondent banking and virtual currency customers, specifically risk management and compliance with applicable laws, rules, and regulations relating to anti-money laundering (“AML”)..." was stated in the order.
- This is the second time in a month the Federal Reserve has acted against industry-friendly banks. In August, the Fed found "significant deficiencies" in Customers Bancorp, Inc.'s risk management and anti-money laundering compliance.
- The notice did not specify how the bank's crypto business violated AML regulations.
- In response, the crypto-friendly bank must submit several compliance plans within 60 to 90 days, as demanded by authorities.
- United Texas Bank has 75 employees and manages approximately $1 billion in assets, according to its latest quarterly report.
