Crypto Bank Flagged By OCC for Sidestepping AML Mandates

Cryptocurrency lender Anchorage Digital Bank failed to comply with anti-money laundering mandates (AML) and violated rules for monitoring suspicious activity, according to a statement from the Office of the Comptroller of the Currency (OCC).

The OCC said the flagship crypto bank, which was granted a conditional charter in January 2021, failed to adopt a compliance program that meets Bank Secrecy Act and AML protocols, OCC said in its consent order. The bank’s compliance program also lacked staff and internal processes to verify customers. Anchorage Digital, which didn’t admit or deny the OCC’s findings, agreed to correct the issues.

Read more: OCC Grants Crypto Firm Anchorage Conditional Digital Banking License

When the OCC conditionally approved Anchorage’s charter, the crypto bank agreed to comply with certain capital and liquidity requirements as well as the OCC’s risk management rules. Having a federally-chartered bank preempts state regulations.

Headquartered in Sioux Falls, South Dakota and co-founded in 2017 by CEO and board member Nathan McCauley and president and board member Diogo Monica, the startup aims to facilitate secure digital asset buying and selling integrated with custody.

Among the OCC’s orders, Anchorage must appoint a compliance committee within 15 days and submit a progress report and plan for remediation. Anchorage has begun corrective action and is committed to remediation, the order said.

“The OCC holds all nationally chartered banks to the same high standards, whether they engage in traditional or novel activities,” Acting Comptroller of the Currency Michael Hsu said in a statement. “When institutions fall short, we will take action and hold them accountable to ensure compliance with federal laws and regulations.”

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The Federal Deposit Insurance Corporation (FDIC) said earlier this month that all institutions under its oversight must give notice if they are engaged in or intend to engage in any activity involving or related to crypto assets. Each crypto-related activity should be evaluated on an individual basis to ensure safety and security for consumers, according to the FDIC.