Crypto-friendly U.S. bank under FDIC investigation
Because the crypto-friendly Cross River Bank used "unsafe" practices, the FDIC steps in.
The crypto-friendly Cross River Bank has engaged in "unsafe" practices, and the FDIC is taking action. Circle and Coinbase have done business with the bank.
The Federal Deposit Insurance Corporation (FDIC) issued a consent order against the crypto-friendly Cross River Bank. According to the order released in the past weeks, the bank engaged in "unsafe" or "misconduct" practices in complying with applicable laws.
The bank must take immediate steps to strengthen its oversight of the "system of internal controls, information systems, lending practices, and internal audit systems related to consumer protection laws and regulations," the order said.
Cross River has not yet admitted or denied the issues cited in the FDIC order. In a previously released statement, Gilles Gade, the bank's CEO, emphasized that the bank maintains the "highest level of compliance." He did not mention the FDIC order that had already been issued.
The U.S. crypto sector lost two of its biggest pillars in mid-March. First, the crypto-friendly Silvergate Bank shut down, then Signature Bank followed. The latter served as a central bridge between crypto and fiat systems.
USDC issuer Circle had sought a partnership with Cross River Bank after the collapse. Coinbase would also have done business with the VC-backed bank.
