Skip to main content
Menu Icon

InfoBytes Blog

Financial Services Law Insights and Observations

Senators request information from California bank on its relationship with collapsed crypto exchange

Federal Issues U.S. Senate Digital Assets Cryptocurrency Bank Secrecy Act Financial Crimes FinCEN

Federal Issues

On December 5, Senators Elizabeth Warren (D-MA), John Kennedy (R-LA), and Roger Marshall (R-KS) asked the CEO of a California-based bank for information regarding its relationship with several cryptocurrency firms founded by the CEO of a now-collapsed crypto exchange. In their letter, the senators pressed the CEO for an explanation for why the bank failed to monitor for and report suspicious transactions to the Financial Crimes Enforcement Network, and asked for information about how deposits it was holding on behalf of the collapsed exchange and related firm were being handled. The senators stressed that the bank has a legal responsibility under the Bank Secrecy Act to maintain an effective anti-money laundering program that may have flagged suspicious activity. “Your bank's involvement in the transfer of [the collapsed exchange’s] customer funds to [the related firm] reveals what appears to be an egregious failure of your bank’s responsibility to monitor for and report suspicious financial activity carried out by its clients,” the letter said. The senators asked the bank to respond to a series of questions by December 19.