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

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The American bank Cross River, which supports crypto projects, received instructions from the Federal Deposit Insurance Corporation (FDIC) on the termination of this type of activity.

FDIC Initiates Enforcement Proceedingsabout “unsafe and unreliable” banking practices regarding cryptocurrency-friendly Cross River Bank. Cross River failed to establish and maintain “effective internal controls, information systems, and sound credit underwriting practices,” the FDIC said. The order states that the bank engaged in “unsafe or unreasonable” practices in its operations.

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

“It is important to note that the order does not mentiondiscriminatory practices or redress. It also does not place any special restrictions on our other partnerships or lending products that we currently offer,” a Cross River spokesperson said.

Founder and Chairman of Cross River GillesGilles Gade admitted that since the collapse of Silicon Valley Bank (SVB), his institution has been under constant scrutiny from various regulatory bodies. In his opinion, the events with SVB have become a new starting point for strengthening regulatory control with a special emphasis on banks supporting the crypto industry.

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