OCC Censures Anchorage Digital Bank over AML Failings

The Office of the Comptroller of the Currency (OCC) has censured the US’s first digital asset bank for failing to adopt and implement a compliance program regarding anti-money laundering.

The OCC said that Anchorage Digital Bank did not have a compliance program adequately covering the required Bank Security Act/Anti-Money Laundering (BSA/AML) program elements.

Anchorage Digital Bank was the first ‘digital asset bank’ the OCC approved for operation, being granted a national trust bank charter in January 2021.

The bank has subsequently begun “corrective action”, the OCC said. The bank has been given 15 days to establish a compliance committee, which must then meet at least quarterly to oversee Anchorage’s regulatory compliance processes.

This includes a specific action plan for addressing the BSA/AML failings, to be delivered within 30 days.

Other requirements include appointing a dedicated senior staff member responsible for BSA/AML compliance and setting up an annual compliance review process. It must also be able to conduct due diligence on new clients, especially if they are considered “high risk”.

Michael Hsu, acting comptroller of the currency, said: “The OCC holds all nationally chartered banks to the same high standards, whether they engage in traditional or novel activities.

“When institutions fall short, we will take action and hold them accountable to ensure compliance with federal laws and regulations.”

The American Bankers Association (ABA) raised concerns last year about digital challengers entering the banking industry after the OCC expanded the scope of the types of firms eligible to apply for national trust charters.

The ABA had warned that banks entering under the new scope may not meet the existing standards and presented novel risks to the payments system existing banks relied on.