US Regulator Slams Crypto Bank Anchorage for AML Lapses

The US Office of the Comptroller of the Currency (OCC) has found some lapses with the know-your-customer (KYC Know Your Customer (KYC) Know Your Customer (KYC) is the process via which the broker is verifying the true identity of its clients in order to comply with multiple regulations. KYC is used to assess the suitability of customers when it comes to anti-money laundering regulations, any type of financial fraud and determining whether they are potentially risky for the brokerage.In particular, KYC guidelines in financial services mandate that individuals make a cohesive effort to verify the identity, suitability, and risks Know Your Customer (KYC) is the process via which the broker is verifying the true identity of its clients in order to comply with multiple regulations. KYC is used to assess the suitability of customers when it comes to anti-money laundering regulations, any type of financial fraud and determining whether they are potentially risky for the brokerage.In particular, KYC guidelines in financial services mandate that individuals make a cohesive effort to verify the identity, suitability, and risks Read this Term) and anti-money laundering (AML Anti-Money Laundering (AML) Anti-money laundering (AML) is a term that describes laws, processes, and regulations that are intended to prevent illegally obtained funds from being disguised as income gained through legitimate means. The fundamental purpose of the AML laws is to help safeguard, detect, and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation.Most exchanges have AML measures that include identity verification Anti-money laundering (AML) is a term that describes laws, processes, and regulations that are intended to prevent illegally obtained funds from being disguised as income gained through legitimate means. The fundamental purpose of the AML laws is to help safeguard, detect, and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation.Most exchanges have AML measures that include identity verification Read this Term) provisions of Anchorage Digital Bank, which was granted a conditional national bank charter.

The regulator issued a consent order against the company for the compliance failures, to which the crypto bank agreed. It issued a cease and desist order and requires Anchorage to revamp its KYC and AML provisions and also accelerate hires.

In addition, the order requires a bank secrecy officer to oversee Anchorage’s compliance with the Bank Secrecy Act, which is deemed as the US’ backbone of banking KYC and AML.

Further, the company needs to form a compliance committee with at least three members and has to review its existing high-risk clients.

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

The company has already consented to all the findings of the banking regulator and said it is “committed to taking all necessary and appropriate steps to remedy the deficiencies identified by the OCC.”

“The findings that were recently shared by the OCC reflect areas for improvement that were identified by the OCC in 2021 in its supervisory capacity,” Anchorage added.

Crypto Banks

Anchorage received its conditional national bank charter from the OCC in January 2021. It is one of the three crypto banks that has received some kind of approval from the federal banking regulator.

Now, the CEO of stablecoin issuer Circle has revealed his plans to obtain a federal banking charter, but the company is yet to apply for it. However, the OCC did not approve any license to crypto companies under the supervision of Acting Comptroller Hsu.