FED Launches Investigation into Cryptocurrency-Friendly Bank

United Texas Bank, a Dallas-based institution known for providing services to cryptocurrency firms, has come under scrutiny by the Fed, which issued a notice today.

The cease-and-desist letter stemmed from what the Fed called “significant deficiencies” in the bank’s compliance with anti-money laundering (AML) laws, as well as its dealings with crypto clients, among other alleged violations.

The Fed’s notice did not specify the specific ways in which the bank’s crypto business failed to comply with AML regulations. However, the order requires United Texas Bank to submit a detailed, five-step action plan within 90 days to address compliance issues and ensure appropriate AML standards are met.

United Texas Bank, which employs 75 people and has approximately $1 million in assets, accepted the order rather than face formal legal action.

The Fed’s crackdown on crypto-friendly banks has intensified in recent months. Just last month, Pennsylvania-based Customers Bank was put under tight surveillance by the Fed due to its ties to crypto firms. Customers Bank had become a preferred banking partner for the U.S. crypto industry following the collapse of Signature Bank and Silvergate Bank in 2023.

With the closures of Signature and Silvergate, cryptocurrency firms in the U.S. have struggled to find banks willing to take them on as clients, with many having to consolidate banking relationships with the few remaining lenders willing to serve the industry or move operations overseas.

*This is not investment advice.