Crypto Project Phase II Feedback

OFFICE MEMORANDUM

Federal Deposit Insurance Corporation

DATE: 07/24/2024

To:
David Wong
Assistant Regional Director

From:
XXXXX
Case Manager

Subject:
XXXXX Discussion

Re:
XXXXX

Meeting Date: 7/24/2024 2:00 PM
Location: Microsoft Teams Meeting

Participants:
- XXXXX (FDIC Case Manager)
- XXXXX (FDIC Data Scientist)
- XXXXX (COO)
- XXXXX (CFO)
- XXXXX (CEO)

Notes

Before the FDIC San Francisco Region issue the feedback letter to XXXXX, a meeting was held, as noted above, to verbally discuss the feedback with the Bank. The following items were discussed during the meeting:

Scope of the Feedback
Feedback is specifically of XXXXX desire to move forward with Phase II.

Findings Based on Review of the Documents Provided:

  1. Code of ethics: Strictly adhere to bank's Code of Ethics Policy. More specifically, insiders with personal interest in XXXXX during Board meetings. The recusal of people with potential conflict of interest during the meetings should also be documented in minutes.

  2. Management should continue to stay abreast of federal and state securities laws governing transactions involving blockchain technology.

  1. Contract: Management should revisit contractual arrangement with XXXXX and complete contract review to ensure the terms and conditions protect the bank's rights / in the bank's best interest.

  2. Third Party Oversight: on XXXXX.
    Inconsistencies noted in XXXXX Requirements and Systems Development document—unclear which entity is responsible for providing governance and maintaining the system of records.

Actions required in the feedback letter:

  1. Written response within 45 calendar days of the receipt of this letter to address: a. Actions in relation to Supervisory Considerations
    b. Actions in relation to new risk identification and controls
    c. Plans and timelines for implementing Phase II

  2. Re-engage with the FDIC for supervisory feedback before implementation of Phase III.

Bank Management Response

Management was receptive to the feedback and committed to sending a response within 45 days. After the meeting, the letter was emailed to the bank, and a copy was forwarded to WDFI. WO was informed, and XXXXX was updated accordingly.

See next page for the feedback letter.