Bank Cancels Bitcoin Service Plan

FDIC
Division of Risk Management Supervision
Division of Depositor and Consumer Protection

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

SENT VIA SECURE ELECTRONIC MAIL

April 26, 2023

Board of Directors
XXXXX XXXXX

Subject: Response to Notification of Engagement in Crypto-Related Activities

Dear Members of the Board:

We acknowledge the notification provided by Senior Vice President (SVP) XXXXX on August 17, 2022, of the bank’s intent to offer Bitcoin services to its customers through a third-party arrangement with XXXXX. The notification was provided pursuant to Financial Institution Letter (FIL), 16-2022, Notification of Engaging in Crypto-Related Activities. On September 14, 2022, the FDIC sent a letter to the Board requesting information necessary for us to assess the safety and soundness, consumer protection, and financial stability implications of the proposed activities. In the letter, we requested that the bank refrain from providing the service to its customers until we completed our review. On December 12, 2022, we sent management follow-up questions and requested additional information to assist in the review. On February 27, 2023, we notified the bank of our intent to perform a Visitation at the bank starting on April 10, 2023, to continue the review of the proposed crypto-related activities and provide supervisory feedback to the bank.

In an email dated March 8, 2023, SVP XXXXX stated that the Board decided to cancel the arrangement with XXXXX and cease pursuing crypto-related activities at this time. We acknowledge the Board’s decision and the bank’s updated status related to this activity. As a result of the bank’s March 8, 2023 communication to the FDIC, we decided to cancel the April 10, 2023 Visitation and the September 14, 2022 FDIC letter to the Board has been superseded. We request that the bank notify us if the status of these activities, or any other proposed crypto-related activity, changes.

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 questions relating to safety and soundness, please contact Case Manager XXXXX or by email at XXXXX. If you have questions relating to CRA or consumer compliance, please contact Review Examiner XXXXX.

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XXXXX

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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 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/.

Sincerely,

Kristie K. Elmquist
Regional Director

cc: XXXXX