OCC FIRST-EVER ENFORCEMENT ACTION AGAINST NEW YORK BASED BANK LACKING CRYPTO AML COMPLIANCE

  • The Office of the Comptroller of the Currency (OCC) on JAN 2020 has made first enforcement action against a U.S. bank—M.Y. Safra Bank, headquartered in New York City because of not being compliant with new crypto rules. Problem was in non-existent(AML) practices for compliance and monitoring of the bank’s virtual asset (VA). Some of them were cryptocurrency exchanges, bitcoin ATMs, and other crypto firms.

    The bank wasn’t following rules set in place and for more than two years MYSB they lacked in AML controls and they weren't doing necessary due diligence when opening new Virtual Assets accounts and didn't take any steps to monitor and investigate suspicious behaviour. As all of this was lacking it was impossible for them to fill up and send suspicious activity reports (SARs) to the Financial Crimes Enforcement Network (FinCEN).

    After this MYSB has now to act and in the next 30 days they must implement a number of measures to update its AML and Bank Secrecy Act (BSA). If they finish all in time there will be no monetary penalties in this first-ever crypto-related enforcement action. Idea is to send a strong message to the financial industry.

    In next, 30 days MYSBs Board of Directors need to:

    • - Create a Committee to oversee bank’s compliance
    in 45 days they must:
    • - Montir bank is implementing a education program that will be taught to all employees and board members which are responsibilities to BSA
    In 90 days they must:

    • - Ensure to implement independent BSA audit
    • - Ensure to implement program that set in place actions and policies to monitor and report suspicious activity
    • - Ensure to implements a newly created system of internal controls and processes to file SARs
    • - Hire independent, third-party consultant to do a SAR history searched and decider are there a cases where additional SARs actions should be taken
    • - Ensure to implements appropriate policies and procedures for gathering CDD information
    • - Create together with management institution-wide Risk Assessment policies for BSA/AML.
    Within 180 days the Board must:
    • - hire full time BSA Officer which will be held perminalty and will be supplied with sufficient staff.
    We can use this action to show that bank regulators in future are going to take a closer look at banks. OCC, Federal Reserve Banks, and the FDIC will try to do all to force financial institutions to force banks to adhere to AML rules and to protect their users.

    Banks will need to do advanced transaction monitoring so our service is becoming mandatory in today's world, as many of the risks stay hidden to banks and they need help in their action to be efficient. So we are sure that policies land actions like READ THE FULL OCC ENFORCEMENT ACTION are going to make a change and bring servises we offer to the public.

    Stay tuned!
    Aleksandar JELIC
Prev Next