Federal banking regulators have issued a consent order in opposition to San Francisco-based Anchorage Digital Financial institution, a cryptocurrency startup that recently announced plans to ascertain a central Indiana workplace.
The Workplace of the Comptroller of the Forex granted Anchorage conditional approval for a federal financial institution constitution in January 2021, making it the primary cryptocurrency firm to achieve this standing.
Anchorage co-founder and CEO Nathan McCauley is a local Hoosier who grew up in Wayne County and graduated from Taylor College.
The corporate affords custodial companies to banks and institutional buyers similar to hedge funds, venture-capital funds, pensions, endowments and labor unions whose holdings embrace cryptocurrencies.
However within the consent order, issued April 21, the OCC mentioned Anchorage has didn’t undertake and implement a program for complying with Financial institution Secrecy Act and anti-money-laundering rules.
The consent order additionally notes that Anchorage “has begun corrective motion and is dedicated to taking all essential and acceptable steps to treatment the deficiencies recognized by the OCC.”
Amongst different issues, the Financial institution Secrecy Act requires banks to observe and report suspicious exercise and file experiences of money transactions that exceed $10,000 per day. The aim of the rules is to detect and deter issues like terrorist financing, money-laundering and different criminality.
“The OCC holds all nationally chartered banks to the identical excessive requirements, whether or not they have interaction in conventional or novel actions,” Performing Comptroller of the Forex Michael Hsu mentioned in a ready assertion. “When establishments fall brief, we’ll take motion and maintain them accountable to make sure compliance with federal legal guidelines and rules.”
In an announcement supplied to IBJ by way of electronic mail, Anchorage mentioned the OCC’s findings “mirror areas for enchancment that had been recognized by the OCC in 2021 in its supervisory capability. Because the OCC acknowledged within the consent order, we have now already been working to strengthen the areas recognized and can proceed to bolster these areas, reinforcing a brand new, digital asset commonplace for inner BSA/AML controls and procedures.”
The consent order requires that Anchorage submit a written motion plan for compliance; set up a suspicious-activity monitoring and reporting program; set up a Financial institution Secrecy Act officer on its board; and implement an worker coaching program, amongst different issues.
As of January, when Anchorage introduced its plans for an Indiana workplace, the corporate’s 200 workers included a handful in Indiana. The corporate has not but opened an workplace right here and hasn’t but established a timeline for doing so, it advised IBJ final week.