Cash News
Customers Bank, one of the few American banks still welcoming cryptocurrency business, has received a warning from the Federal Reserve. The Fed, which oversees the U.S. money system, is unhappy with the bank’s handling of risk and efforts to prevent money laundering. This is particularly noteworthy because Customers Bank is a key player in the crypto world.
Banks – A Major Crypto Player?
Customers Bank is not just any bank. It supports cryptocurrency companies with their financial needs. The bank uses a system called the Customers Bank Instant Token (CBIT), which allows people to make U.S. dollar payments anytime, day or night. Because of its close ties to crypto, the bank is now facing increased scrutiny. With around one-sixth of its funds coming from the cryptocurrency sector, the news has had a big impact, causing the bank’s stock price to drop by over 13%.
Steps, Risks, and More
The Federal Reserve is demanding action from the bank. Although Customers Bank hasn’t been fined yet, it has 60 days to fix the issues identified by the Fed. The bank needs to submit a detailed plan for improving its risk management and money laundering controls. If the bank fails to meet these requirements, it could face tougher penalties.
This comes amid recent issues with other crypto-friendly banks like Silvergate and Signature.
What this Means for the Crypto World
This warning to Customers Bank is part of a larger trend. Banks dealing with cryptocurrencies are under more scrutiny than ever. Problems with other banks, such as Silvergate and Signature, have made these issues even more critical. How Customers Bank handles this situation could affect other banks and the cryptocurrency industry as a whole.
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What do you think? Is this the beginning of the end for crypto-friendly banks?