According to a file made public on April 28, Cross River Bank has received a consent order from the FDIC requesting more supervision.
In that filing, the FDIC asserted that Cross River Bank had engaged in “unsafe or unsound banking practices” in accordance with the rules and laws governing fair lending.
The regulator required the business to implement more stringent oversight and controls as well as corrective measures through a related agreement.
The order said that Cross River Bank would not confirm or deny any wrongdoing. A spokeswoman from Cross River Bank claimed, in a different Wall Street Journal article, that the action had more to do with a review of the company’s lending policies starting in 2021 than it did with its bitcoin or payments business operations.
In 2018, the FDIC also targeted the bank and ordered it to adjust several of its procedures and pay a fine of around $642,000 at the same time. The cryptocurrency exchange Coinbase and the USDC issuer Circle are just two of the many cryptocurrency businesses that Cross River Bank is known to cooperate with.
In March 2022, the corporation gave a “crypto first” strategy explanation to the tech news website TechCrunch. An Andreessen Horowitz partner company there stated that the company backs “many other leading crypto companies.”
The incident is noteworthy due to the collapses of other crypto-friendly institutions including Silvergate Bank and Silicon Valley Bank, both of which fell in March, even though the FDIC’s actions have nothing to do with the bank’s cryptocurrency operations.
Although there are currently no signs that this is happening, those incidents show that a significant controversy could drive away crypto clients of Cross River Bank or prompt them to withdraw more money than usual.
