Federal Reserve orders United Texas Bank to halt crypto services over AML concerns
Within 90 days, considering August 29 as the starting date, UTB's board of directors must present a plan that shows compliance with BSA and AML rules.
The Federal Reserve issued a cease and desist order to United Texas Bank (UTB) on August 29, directing it to stop offering crypto services. The order follows an examination concluded by the Federal Reserve Bank of Dallas and the Texas Department of Banking in May 2023, which identified alleged deficiencies in the bank's corporate governance, oversight, and compliance with anti-money laundering (AML) regulations.
Moreover, the financial authorities revealed issues related to foreign correspondent banking and virtual currency customers. Specifically, the bank's risk management and compliance with the Bank Secrecy Act (BSA) and AML requirements were found to be inadequate.
60 to 90 days to comply
In response to these findings, the crypto-friendly bank must submit several plans to comply within 60 to 90 days, as authorities have demanded. Within 90 days, considering August 29 as the starting date, UTB's board of directors must present a plan that shows compliance with BSA and AML rules. On a shorter deadline of 60 days, the bank must cover a broader set of requirements, such as strengthening board oversight of BSA and AML policies compliance, a corporate governance plan addressing third-party report recommendations, and a revised BSA/AML compliance program.
