Federal Reserve Cracks Down on Crypto-Friendly Banks

On September 5, 2024, the U.S. Federal Reserve issued a cease-and-desist order to United Texas Bank due to deficiencies in risk management and non-compliance with Anti-Money Laundering (AML) regulations related to its crypto clients. The bank has 90 days to submit a corrective action plan to align with federal AML standards.

This move continues the Fed's recent crackdown on crypto-friendly banks, following the high-profile collapses of Silvergate and Signature Bank. As a result, many crypto firms in the U.S. are struggling to maintain banking relationships, leading to a potential exodus offshore. This increased regulatory pressure is raising concerns within the crypto industry about potential constraints on future growth and banking partnerships.