Anchorage Digital Bank gets OCC consent order for AML compliance failures

Anchorage Digital violated the conditional charter approved by the OCC in 2021 by not meeting BSA/AML requirements laid out by the BSA and enforced by the OCC through its charter as a bank, according to the regulator.

“The OCC holds all nationally chartered banks to the same high standards, whether they engage in traditional or novel activities,” said Acting Comptroller of the Currency Michael Hsu in a press release. “When institutions fall short, we will take action and hold them accountable to ensure compliance with federal laws and regulations.”

In its consent order, the OCC found Anchorage Digital had deficiencies in its BSA/AML compliance program, specifically with its customer due diligence procedures and regarding its procedures for monitoring suspicious activity.

Without admitting or denying the OCC’s findings, Anchorage Digital agreed to convene a compliance committee under its board of directors within 15 days of the date of the order. The committee must consist of at least three members, the majority of whom are directors and not employees or officers of the bank.

The committee must submit an action plan to the OCC within 30 days of the date of the order that describes the corrective actions the bank is taking to strengthen its BSA compliance, as well as the results and status of the plan. The action plan must be approved by the OCC.

The bank must also hire a BSA officer “vested with sufficient independence, authority, and resources to fulfill the duties and responsibilities of the position and ensure compliance with the requirements of the Bank Secrecy Act and its implementing regulations,” the order said.

The officer must ensure the bank’s action plan complies with the BSA and report progress to the board and senior management about the action plan’s status. The board must also ensure the new BSA officer has adequate staff to perform his or her duties, the OCC said.

Within 90 days, the board must adopt and implement policies and procedures to ensure the bank adheres to “acceptable, appropriate risk-based policies” for customer due diligence and suspicious activity monitoring. The soundness of the bank’s suspicious activity monitoring system must be verified by an independent third party.

In addition, the bank must hire an independent third-party consultant to review the bank’s previous suspicious activity monitoring and write a report on the findings to the OCC.

Anchorage Digital’s response: “As the OCC acknowledged in the consent order, we have already been working to strengthen the areas identified and will continue to bolster these areas, reinforcing a new, digital asset standard for internal BSA/AML controls and procedures,” a bank spokesman said in an emailed statement.

“Anchorage is proud to be the first digital asset custody bank to be held to the same standards as traditional federally chartered banks,” the spokesman continued. “Meanwhile, we maintain the steadfast belief that we should not be the only such federally regulated digital asset bank. This shouldn’t deter others from working together with the OCC to establish regulatory precedent. Instead, we hope it encourages others to follow suit knowing that a workable path forward exists.”