Crypto-Linked Cross River Bank Receives FDIC Order
Cross River Bank has received a consent order from the FDIC requiring additional supervision, according to a filing made public on April 28.
The bank receives orders for compliance with lending
The FDIC suggested in that filing that Cross River Bank engaged in “unsafe or unsound banking practices” related to fair lending laws and regulations.
The regulator required the company to introduce greater supervision and controls and make corrections through a related agreement.
Cross River Bank will neither admit nor deny wrongdoing, the order states.
In a separate report by the Wall Street Journal, a Cross River Bank representative said the action was related to a review of the company’s lending practices from 2021 rather than its cryptocurrency or payments business.
The bank was also previously targeted by the FDIC in 2018 when the regulator forced the company to change certain practices and pay a fine of nearly $642,000.
Cross River Bank serves crypto customers
Cross River Bank is known for serving and working with various cryptocurrency companies, including crypto exchange Coinbase and USDC issuer Circle.
The company previously described a “crypto first” strategy to technology news site TechCrunch in March 2022. There, a partner firm of Andreessen Horowitz suggested that the firm supports “many other leading crypto companies.”
While the FDIC’s actions are not related to the bank’s crypto operations, the incident is notable because of the failures of other crypto-friendly banks such as Silvergate Bank and Silicon Valley Bank, which both collapsed in March.
These events show that significant controversy could cause Cross River Bank’s crypto clients to sever ties with the bank or cause clients to make higher-than-usual withdrawals – although there is no indication that this is currently happening.
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