Federal Reserve found ‘significant deficiencies’ in AML, Bank Secrecy compliance at Customers Bank 

The Federal Reserve and Customers Bank filed a written agreement on Thursday, with a plan to disclose operations and crypto risk exposure

article-image

rafapress/Shutterstock modified by Blockworks

share

The Federal Reserve of Philadelphia has charged Customers Bank with anti-money laundering and Bank Secrecy Act compliance failures. 

The Fed claims that it found “significant deficiencies related to the Bank’s risk management practices and compliance with the applicable laws, rules and regulations relating to anti-money laundering.”

Both the Fed and Customers Bancorp entered the written agreement. The bank will adopt the programs 10 days after an agreement is reached, according to the Thursday filing. 

“Within 60 days of the effective date of this Agreement, the board of directors of the Bank shall submit a written plan to the Reserve Bank to strengthen board oversight of the management and operations of the Bank’s compliance with the BSA/AML Requirements and OFAC Regulations,” the filing said.

That plan will include actions taken to improve its digital asset strategy and other “major operations.”

Read more: Coinbase UK subsidiary fined $4.5M for insufficient money laundering controls

The board will also include “measures to improve the quality, comprehensiveness and granularity of the information and reports received and reviewed by the Bank’s board of directors in their oversight of the Bank and its operations, including information related to its digital asset strategy as well as proposed activities.”

Customers Bank will have to report risk exposures related to crypto, as well as steps to measure and assess those exposures. 

The Fed will require the bank to give the Reserve 30 days notice prior to implementing any initiatives or changes to its crypto strategy, which includes both relationship announcements and product launches.

Earlier this summer, CoinDesk reported that Customers Bank allegedly debanked some crypto hedge funds, though the accounts were notably inactive.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Unlocked Advisory-min.png

Research

This report distills Blockworks Advisory’s research on incentive programs and their analysis, offering a foundation for designing future initiatives and advancing industry-wide standards. By highlighting key lessons and methodologies, we aim to empower protocols to make informed, data-driven decisions.

article-image

Will investors take a 10% lower return to get access to a regulated investment wrapper?

article-image

Brian Armstrong called out the hire of Gurbir Grewal, who had been the SEC’s enforcement division director since 2021

article-image

Certain senators will be interested to learn about Atkins’s private sector business interests, specifically those related to crypto

article-image

Innovative smart debt and collateral features are fueling Fluid’s rise to $1.2 billion TVL, reshaping the Instadapp brand

article-image

Crypto’s liquidity engine is now worth over $300 billion

article-image

Bitcoin Jesus is arguing that the Department of Justice’s tax fraud charges are “unconstitutional”