Cross River Bank, which is linked to the crypto industry, has received an order from the Federal Deposit Insurance Corporation (FDIC). The order requires the bank to strengthen its compliance program and make improvements to its risk management processes in accordance with regulatory requirements. Cross River Bank is considered a leading fintech bank and has established partnerships with prominent players in the crypto space. The bank is committed to addressing the concerns raised by the FDIC and fulfilling its obligations as a responsible financial institution.
Cross River Bank Receives FDIC Consent Order: A Look at the Details
Cross River Bank, a bank serving various cryptocurrency companies including Coinbase and Circle, has received a consent order from the FDIC requiring further oversight. The order, which was made public on April 28th, comes after the FDIC found that the bank engaged in “unsafe or unsound banking practices” related to fair lending laws and regulations.
The regulator has demanded that Cross River Bank introduce greater oversight and controls, and make corrections through a related agreement. Although the bank will neither admit nor deny any wrongdoing, it is clear that the bank is taking steps to address the issues raised by the FDIC.
Despite this news, it’s important to note that the FDIC’s actions are not related to Cross River Bank’s cryptocurrency business. However, the fact that the bank serves many cryptocurrency clients is noteworthy given the failures of other crypto-friendly banks such as Silvergate Bank and Silicon Valley Bank, both of which collapsed in March.
While there is no indication that Cross River Bank’s crypto clients are currently breaking ties with the bank, it’s possible that significant controversy could lead to higher-than-usual client withdrawals. This highlights the importance of maintaining regulatory compliance in the banking industry, particularly for banks serving the cryptocurrency space.
It’s worth noting that this is not the first time that Cross River Bank has come under scrutiny from the FDIC. In 2018, the regulator compelled the company to change certain practices and pay a fine of nearly $642,000.
Despite this, the bank maintains a strong client base and continues to serve numerous cryptocurrency companies. In fact, the bank previously described a “crypto first” strategy to the tech news site TechCrunch in March 2022, suggesting that the firm supports “many other leading crypto companies”.
In conclusion, while the FDIC’s consent order may have raised some concerns, it appears that Cross River Bank is taking the necessary steps to address the issues raised by the regulator. The bank’s commitment to serving the cryptocurrency industry is commendable, and it will be interesting to see how this recent news affects its client base moving forward.