U.S. Federal Reserve Identifies Deficiencies in Customers Bancorp

The U.S. Federal Reserve Board announced significant deficiencies in Customers Bancorp, Inc.’s risk management and compliance with anti-money laundering (AML) laws in an enforcement action recently filed.

The bank, which services digital asset customers, agreed to submit a written plan to improve board oversight concerning AML requirements and sanctions-related regulations.

Additionally, Customers Bancorp is required to enhance its risk management practices regarding its digital asset strategy. This includes ensuring personnel responsible for the strategy have the necessary expertise, independence, defined roles, and adequate resources.

The Federal Reserve also requested an amended customer due diligence program to verify customer identities and identify those who might present a heightened risk of engaging in illicit activities through the bank.

Customers Bank, under the ownership of Customers Bancorp, did not immediately respond to inquiries for comment.

In response, some members of the crypto industry have accused the Federal Reserve of initiating ‘Chokepoint 2.0,’ suggesting a more extensive crackdown is underway against digital asset activities.

Matthew Sigel from VanEck stated that Customers Bancorp has been heavily involved with crypto funds and projects, indicating a trend of enforcement actions against them.

Nic Carter, from Castle Island Ventures, echoed sentiments that the Fed and FDIC are systematically dismantling crypto-friendly banks.

Update: Aug. 8, 4:25 p.m. UTC to include comments on X.