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Anchorage, the first federally chartered crypto bank, has settled a case that alleges the company does not have an adequate anti-money laundering (AML) programme in place.
The Office of the Comptroller of the Currency (OCC) claims Anchorage failed to adopt and implement a compliance programme that adequately covers the required Bank Secrecy Act/anti-money laundering (BSA/AML) requirements.
“The OCC holds all nationally chartered banks to the same high standards, whether they engage in traditional or novel activities,” said acting comptroller Michael Hsu.
“When institutions fall short, we will take action and hold them accountable to ensure compliance with federal laws and regulations.”
Anchorage was granted conditional approval to operate as a crypto bank last January by then acting comptroller Brian Brooks on his last day in office, despite intense objection by numerous agencies and industry participants.
The federal charter means that Anchorage is regulated on the same footing as other national banks and is required to comply with BSA/AML-related laws and regulations.
“Anchorage is proud to be the first digital asset custody bank to be held to the same standards as traditional federally chartered banks,” the company said in an email statement.
This action “shouldn’t deter others from working together with the OCC to establish regulatory precedent; instead, we hope it encourages others to follow suit knowing that a workable path forward exists”, it added.
The consent order requires Anchorage to present and execute an action plan, approved by the bank regulator, which touches on all necessary elements of a US AML programme, also known as the “five pillars”.
This means Anchorage must appoint a qualified BSA officer, implement appropriate risk-based policies and procedures for collecting customer due diligence (CDD) information, and set up an “acceptable, written suspicious activity monitoring and reporting program”.
Anchorage will also have to carry out an exercise to see whether additional suspicious activity reports should be filed for any previously unreported suspicious activity. adhere to independent testing “commensurate with the bank’s money laundering, terrorist financing and other illicit financial activity risk profile” and implement an “acceptable written” training programme for its employees.
These findings reflect areas for improvement that were identified by the OCC in 2021 in its supervisory capacity, the crypto bank explained.
“As the OCC acknowledged in the consent order, we have already been working to strengthen the areas identified and will continue to bolster these areas, reinforcing a new, digital asset standard for internal BSA/AML controls and procedures.”
