As a seasoned researcher with over two decades of experience in the financial sector and a keen interest in the intersection of traditional finance and emerging technologies like cryptocurrencies, I find myself closely watching the recent developments involving United Texas Bank and the US Federal Reserve’s cease and desist order.
As an analyst, I’m sharing that I, myself, have learned about the recent development involving United Texas Bank based in Dallas. They’ve been ordered to halt operations by the US Federal Reserve, following a cease and desist order, as stated in a press release on September 4, 2024. The bank has been recognized for its crypto-friendly approach, making this news noteworthy in the evolving landscape of digital assets.
Federal Reserve Keeping A Close Eye On Bank’s Crypto Business
The U.S. Federal Reserve has flagged United Texas Bank for having substantial issues in their transactions with cryptocurrency companies, particularly in areas like foreign correspondent banking and digital money clients.
To clarify, the Federal Reserve has expressed worries about United Texas Bank’s risk management systems, adherence to anti-money laundering (AML) guidelines, and compliance with the Bank Secrecy Act (BSA). Importantly, the formal directive does not explain specifically where the bank failed to meet the set standards or breached its compliance program.
Based on the schedule, the Federal Reserve conducted an examination of a Dallas-based bank, United Texas Bank, in May 2023. In response, United Texas Bank has implemented numerous steps to strengthen their Anti-Money Laundering (AML) and Bank Secrecy Act (BSA) compliance program.
The bank’s board is preparing a proposal aimed at enhancing its Anti-Money Laundering (AML) and Bank Secrecy Act (BSA) oversight, which they plan to submit. Following the issuance of a cease and desist order, the bank has 90 days to submit this plan. Moreover, within 60 days, the bank is required to provide a revised written customer due diligence program as well.
The likely cease and desist order faced by the United Texas Bank for dealing with cryptocurrencies will alert other crypto-friendly banks in the US, forcing them to review and upgrade their existing risk and AML mechanisms.
Upcoming US Elections Crucial For Crypto Industry
The increased scrutiny on banks and financial institutions handling digital currencies underscores the impact that the upcoming U.S. Presidential election in November 2024 might have on these matters.
In my recent analysis, I’ve found that, similar to what was earlier reported by Bitcoinist, the Wyoming-based Custodia Bank has made the tough decision to reduce its workforce by approximately 25%. This move is aimed at conserving financial resources to meet the costs associated with ongoing legal battles against the Federal Reserve.
Due to the consistent monitoring of the cryptocurrency market by the Biden administration, there seems to be a slight shift in feelings within the crypto sector leaning more towards Donald Trump as a potential Republican presidential candidate.
Trump recently expressed his desire to position the United States as the leading global hub for cryptocurrency. He has criticized the persistent scrutiny of crypto businesses within the country and hinted that he would consider replacing the current chair of the Securities and Exchange Commission, Gary Gensler, if his presidential bid is successful.
In fact, it’s far from accurate to claim that the crypto industry hasn’t seen any progress or innovation during the Biden administration.
Previously this year, the Securities and Exchange Commission (SEC) gave its approval for Bitcoin exchange-traded funds (ETFs), which were eagerly awaited. This decision opened up an opportunity for billions of dollars to flow into the leading digital currency. Likewise, in July 2024, the SEC endorsed Ethereum ETFs, enabling institutional and individual investors to invest in the top smart contract platform.
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2024-09-06 17:12