The Board of Governors of the Federal Reserve System (FED) published a supervisory letter that outlines the steps Board-supervised banks should take prior to engaging in crypto-asset-related activities; these steps include assessing whether such activities are legally permissible and determining whether any regulatory filings are required.
The supervisory letter states that supervised banking organizations engaging or seeking to engage in crypto-asset-related activities should notify the Board prior to engaging in crypto-asset-related activities. Any supervised banking organization that is already engaged in crypto-asset-related activities should notify its lead supervisory point of contact at FED promptly regarding the engagement in such activities, if it has not already done so. The letter further highlights that, prior to engaging in any crypto-asset-related activity, a supervised banking organization must ensure such activity is legally permissible and determine whether any filings are required under applicable federal or state laws. If any supervised banking organization has questions regarding the permissibility of any crypto-asset-related activities or about the applicability of any filing requirements, it should consult its lead supervisory point of contact at FED.
In all cases, a supervised banking organization should, prior to engaging in these activities, have in place adequate systems, risk management, and controls to conduct crypto-asset-related activities in a safe and sound manner and consistent with applicable laws, including applicable consumer protection statutes and regulations. This includes having adequate systems in place to identify, measure, monitor, and control the risks associated with such activities on an ongoing basis. These systems should cover operational risk, financial risk, legal risk, compliance risk, and any other risk necessary to ensure the activities are conducted in a manner that is consistent with safe and sound banking and in compliance with applicable laws, including applicable consumer protection statutes and regulations. State member banks are also encouraged to notify their state regulator prior to engaging in any crypto-asset-related activity.
Keywords: Americas, US, Banking, Regtech, AML CFT, Financial Stability, Crypto Assets, FED
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