FDIC-Bank Email Exchange Discussion Crypto Activity
From: XXXXX Sent: Friday, January 27, 2023 8:29 AM To: FDIC Kansas City Regional Office Subject: RADD: XXXXX
Email only
From: XXXXX Sent: Friday, September 16, 2022 7:23 AM To: XXXXX Subject: FDIC Questions Regarding Crypto-Activities
Hi XXXXX,
As we discussed on the phone earlier this week, we have some additional questions surrounding the crypto-activities the bank is engaged in. I know this may take some time to gather the information as you’re currently having a Consumer Compliance Exam, but do you think you could send it with the 10/31/2022 XXXXX response?
Related to XXXXX
As of 5/30/22 there were XXXXX in Staging testing and XXXXX in Employee testing. Could you please provide us with an update on the status of plans for Employee Testing, Beta Testing, and the Soft Launch? For those phases underway do you have an idea of the number of transacting users and #’s of transactions processes so far?
The XXXXX Agreement between XXXXX agree that XXXXX is responsible for notifying customers of all transfers of funds out of a Customer’s account held at Banking Partners related to cryptocurrency transactions. Are these disclosures provided directly through the XXXXX mobile app or elsewhere? Please provide examples of the disclosures provided for transfers both in and out of a Customer’s account at XXXXX if different than what already provided within the mobile app screenshots.
From the initial information request we were provided with screenshots of the Crypto tab of XXXXX mobile application. Are these there any other pages a customer would see before/after clicking “Get Started” and before arriving at the main “Crypto” page? If there are other pages, please provide screenshots.
Also, we would like to see screenshots of any other page on the XXXXX Mobile application beyond the Crypto tab that reference information on Crypto, disclose that banking services provided are by XXXXX or include Member FDIC. This would include anything contained on the XXXXX tabs. If it is easier to provide a screen recording of all screens available on the application or show a live demonstration of all the tabs and screens that would be useful.
The second Crypto App screenshot shows a document called “XXXXX”, I do not believe we have a copy of that disclosure. If developed could we review this document?
From the screenshots of the Crypto Tab we see that there are no crypto trading fees, is bank management aware of any fees that will be charged related to the purchase/sale of crypto assets?
Please provide information the process XXXXX and XXXXX use to maintain records of customer accounts and balances that are disclosed to be eligible for FDIC deposit insurance. This would include any documentation of the applicability of FDIC deposit insurance to these accounts, policies and procedures relating to the flow of funds to and from the FBO account, and copies of agreements between XXXXX and XXXXX related to accounts ownership, controls, and recordkeeping.
Related to XXXXX:
Also, as of XXXXX, crypto products/servicing had not yet been built, has there been any update to the status of this activity? If not is there a planned timeline for development/testing?
Related to XXXXX:
Lastly, the information provided in the initial crypto request includes a document titled: XXXXX that appears to relate to an existing customer XXXXX proposing a change to an XXXXX account with funds held at XXXXX to include a new XXXXX through which account holders to purchase crypto assets through XXXXX. Information on this activity was not provided in the initial notification to the FDIC on May 10th, do you have any additional information on the status of XXXXX implementing this new service and has the bank reviewed any updates customer disclosures related to the activity?
Thanks, and have a great weekend!
XXXXX
Case Manager
FDIC, Kansas City Regional Office
XXXXX