Crypto-friendly United Texas Bank sees regulatory complications from the US Federal Reserve.
The US crypto regulatory landscape has shown increased activity in 2024.
Crypto firms’ services banks, in other words, crypto-friendly banks are a declining group of financial organizations within the sector. However, they have not been spared from regulatory impediments in the past. Recently, one specific, United Texas Bank caught the attention of the US Federal Reserve. The regulator has stated allegations of the bank’s failure to comply with Anti-Money Laundering (AML) regulations.
Notably, the Federal Reserve released a cease-and-desist order requiring the crypto-friendly bank to permanently halt operations. Additionally, the order was released with the joint consent of the United Texas Bank as it has proposed a 90-day period to devise compliance- strengthening plans.
The order stated that this plan, devised by the United Texas Bank Board of Directors, should be acceptable to the Federal Reserve Supervisors. Moreover, it must provide details on the actions that will “maintain effective control” on overseeing and strengthening compliance with AML regulations.
How is the United Texas Bank Proceeding Further?
The order requires the United Texas Bank to detail the measures that will be taken to prevent non-compliance with the Bank Secretary Act (BSA) and AML regulations. Additionally, the bank also has a 60-day period to submit a corporate governance plan and revised BSL/AML compliance program.
However, the FED has not sighted how the crypto-friendly bank violated AML regulations or was non-compliant with regulations. Meanwhile, the United Texas Bank is a small-scale with a total of 75 employees and holds total net assets worth $1 billion.
The US crypto regulatory landscape has become quite a mayhem as activities spur on a daily basis. Leading regulatory bodies — the Fed and the SEC — have placed spotlights on digital asset firms this year, which has resulted in a rough phase for crypto-related institutions.
Presently, the SEC is battling Ripple and Coinbase on regulatory violations. On the other hand, the FED is working on interest rate cuts, which may affect cryptocurrency prices, particularly Bitcoin.
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