OCC Targets Anchorage Digital over AML Compliance

Anchorage Digital, a crypto custody bank, has found itself in hot water with the Office of the Comptroller of the Currency in the United States. The OCC disclosed that it plans on pursuing cease and desist proceedings because the bank is in violation of some requirements for anti-money laundering. The OCC made the announcement on Thursday and said that they had issued a consent order against the custody bank because it had not implemented a compliance program, as required in accordance with AML standards and the Bank Secrecy Act (BSA). According to the government bureau, this means that Anchorage Digital has violated the operating agreement it had signed back in January 2021 with the OCC.

The acting comptroller of the currency, Micahel Hsu, said that the OCC expects all nationally chartered banks to comply with the same high standards, regardless of what kind of activities they engage in. He went on to say that they would hold institutions accountable when they don’t live up to the standards in order to ensure they adhere to all federal regulations and laws. The comptroller’s findings were neither denied nor admitted by Anchorage Digital, but reports indicated that the bank had already begun to take the steps appropriate and necessary for countering the deficiencies.

The definition of a consent order is that two parties have come to an agreement for moving forward, which are the OCC and Anchorage in this situation. The latter said in a statement that it had already been making an effort to reinforce the areas that the OCC has highlighted and would implemented a new standard for digital assets in order to comply with AML/BSA procedures and controls. According to the bank, a regulatory precedent could be established because of the actions of the OCC and this would provide encouragement to other companies to also launch digital asset banks that are federally regulated.

The OCC stated that the bank needs to establish a committee within a 15-day deadline for taking corrective measures in order to ensure compliance with the BSA and AML standards. It also has to provide progress reports on the execution of the plan. Furthermore, Anchorage was also ordered to have a BSA officer for ensuring compliance. In January 2021, the company had become the first crypto firm to be granted the OCC’s national bank charter. Brian Brooks, the former Comptroller of the Currency, had a brief stint as Binance’s CEO and is now with Bitfury.