Bank Terminates Crypto Services Plan

FDIC
DIVISION OF RISK MANAGEMENT SUPERVISION

Dallas Regional Office
600 North Pearl Street, Suite 700
Dallas, Texas 75201
(214) 754-0098 FAX (972) 761-2082

January 6, 2023

Board of Directors
XXXXX
XXXXX

Subject: Response to Notification Regarding Crypto-Related Activities

Dear Board of Directors:

On February 22, 2022, we received XXXXX (the Bank) notification of the Bank’s intent to offer customers the ability to buy, sell, and hold Bitcoin and Ethereum through the Bank’s digital and mobile banking platforms in conjunction with XXXXX in response to Financial Institution Letter (FIL), FIL-16-2022, Notification of Engaging in Crypto-Related Activities. On April 15, 2022, the FDIC sent a letter to the Board requesting that the Bank not proceed with implementation while the FDIC considered the proposed crypto-related activity. On August 8, 2022, the FDIC sent a letter to the Board requesting information necessary to allow the FDIC to assess the safety and soundness, consumer protection, and financial stability implications of such activities. During the December 5, 2022, Safety and Soundness examination, additional information was requested and meetings were held with Bank management to discuss the proposed activity.

In a subsequent email sent to the FDIC on December 22, 2022, Bank management stated that effective December 21, 2022, the Bank has terminated the agreement with XXXXX and the contract amendment relating to XXXXX with XXXXX. The email also stated XXXXX and XXXXX have accepted the Bank’s request to withdraw from the project. The FDIC acknowledges the Bank’s updated status related to this activity, and the April 15, 2022, FDIC letter to the Board has been superseded as a result of the Bank’s December 22, 2022, communication to the FDIC. We request that the Bank notify this office if the status of this activity, or other crypto-related activity, changes in the future.

Written correspondence should be addressed to Kristie K. Elmquist, Regional Director, FDIC, Dallas Regional Office, and sent as a PDF document through the FDIC’s Secure Email portal (https://securemail.fdic.gov/) using the following e-mail address: XXXXX@FDIC.gov. Information about how to use secure email and FAQs about the service can be found at https://www.fdic.gov/secureemail/.

This letter is confidential and may not be disclosed or made public in any manner under Part 309 of the FDIC Rules and Regulations (12 CFR part 309). If you have any questions, please contact Assistant Regional Director Joseph A. Meade at XXXXX or XXXXX.

Sincerely,

Signed by Kristie K. Elmquist
Kristie K. Elmquist
Regional Director

cc:
Federal Reserve Bank of Kansas City
XXXXX