September 22, 2023

Cross River Receives FDIC Order to Immediately End Support for Crypto Projects

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Cross River Receives FDIC Order to Immediately End Support for Crypto Projects

The American bank Cross River, which supports crypto projects, received an instruction from the Federal Deposit Insurance Corporation (FDIC) to stop this type of activity.

FDIC initiated enforcement proceedings on"unsafe and unreliable" banking practices against cryptocurrency-friendly bank Cross River. According to the FDIC, Cross River failed to establish and maintain "effective internal controls, information systems, and prudent credit underwriting practices." The order says that in its operations the bank was guided by "unsafe or unreasonable" methods of work.

Commenting on the FDIC's order, Cross River's press office said the bank's board agreed to strengthen oversight and controls and ensure that necessary corrective action is taken.

“It is important to note that the order does not mentiondiscriminatory practices or redress. It also places no particular restrictions on our other partnerships or loan products that we currently offer,” a Cross River spokesperson said.

Cross River Founder and Chairman Gilles Gadet(Gilles Gade) acknowledged that since the collapse of Silicon Valley Bank (SVB), his institution has been subject to constant scrutiny by various regulatory bodies. In his opinion, the events with SVB have become a new starting point for strengthening regulatory control, with a special focus on banks that support the crypto industry.

Former members of the Financial Services CommitteeThe US Congress requested information from the FDIC, FRSO and OCC confirming or refuting possible concerted actions to debank cryptocurrency companies.