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.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 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.

recent research

Research Report Templates.jpg

Research

Figure, founded by former SoFi CEO Mike Cagney, has emerged as a leader in onchain RWAs, with ~$17.5B publicly tokenized. The platform’s ecosystem volume is growing ~40% YoY as it expands beyond HELOCs into student loans, DSCR loans, unsecured loans, bankruptcy claims, and more. Operationally, Figure cuts average loan production cost by ~93% and compresses median funding time from ~42 days to ~10, creating a durable speed-and-cost advantage.

article-image

The Ethereum co-founder suggested LINEA holders would be eligible for other airdrops in cryptic tweet

article-image

The layer-2’s biggest release yet brings benefits — but a post-upgrade outage caused a chain reorg

article-image

Crypto is shifting into risk-on mode — pump.fun dominates meme activity, while Lido leans on treasury maneuvers

article-image

If the president breaks the Fed, he’ll own the budget problems

article-image

Combining Franklin Templeton’s tokenization expertise with Binance’s trading infrastructure could speed crypto adoption, companies say

article-image

The firm’s upcoming filing comes as competition heats up over the USDH stablecoin