First Digital Asset Bank: OCC Gets Consent Order Against Anchorage Digital Bank for AML Shortcomings

 

Anchorage Digital Bank, the first-ever charted digital asset bank, has been hit with a consent order from the Office of the Currency of the Comptroller (OCC), the lead federal bank regulator.

According to a statement by the OCC, that action was taken due to the bank’s “failure to adopt and implement a compliance program that adequately covers the required Bank Secrecy Act/Anti-money laundering (BSA/AML) program elements.”

Anchorage Digital Bank was approved by the OCC in early 2021. At that time, Anchorage called the approval a major milestone, not only for them as an organization, but for the crypto industry and the wider financial world.

According to the Order, Anchorage “failed to adopt and implement a compliance program that adequately covers the required BSA/AML program elements, including, in particular, internal controls for customer due diligence and procedures for monitoring suspicious activity, BSA officer and staff, and training.”

Anchorage is required to promptly take remedial action regarding any deficiencies. An “Action Plan” must be shared with the OCC.

Anchorage must also engage a third-party consultant to review and provide a written report on the Bank’s suspicious activity monitoring – or a SARs look-back.

There is no monetary penalty being assessed on the bank and the Order is deemed a settlement of the cease and desist proceedings against the Bank contemplated by the OCC.

Acting Comptroller of the Currency Michael J. Hsu, issued the following statement on the Consent Order:

“The OCC holds all nationally chartered banks to the same high standards, whether they engage in traditional or novel activities. When institutions fall short, we will take action and hold them accountable to ensure compliance with federal laws and regulations.”

Last December, Anchorage announced a significant $350 million funding round led by big names like Goldman Sachs, Andreessen Horowitz and others. The bank was valued at over $3 billion. The funding was said to be used to grow Anchorage’s team and to improve infrastructure. Anchorage was originally created to provide custody with the most secure and safest platform for institutions on the market. Today, Anchorage also offers, prime brokerage services and custom API integrations for institutions interested in digital assets. While currently serving the institutional sector, Anchorage could move into retail at some point in the future.

 

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