Execs at crypto-friendly Evolve Bank leave amid regulatory crackdown: Report

Alex O’Donnell4 hours agoExecs at crypto-friendly Evolve Bank leave amid regulatory crackdown: ReportThe bank services several crypto-friendly financial technology companies.438 Total views5 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTCOINTELEGRAPH IN YOUR SOCIAL FEEDFollow ourSubscribe onThree executives at Evolve Bank & Trust have left the crypto-friendly bank following setbacks, including a May cybersecurity breach and a June enforcement action, according to a report by Jason Mikula of FintechBusinessWeekly.com. 

According to Mikula, the bank’s chief credit officer, corporate controller, and chief lending officer for open banking have left their roles. Cointelegraph corroborated this report against the executive’s LinkedIn accounts and Evolve’s public job listings. Evolve did not immediately respond to requests for comment. 

The exits are the latest in a series of challenges facing the financial institution, which provides behind-the-scenes banking services for several crypto-friendly financial technology companies. Its partners include Mercury — which offers banking to startups, including Web3 companies — and Stripe, a payments processor and crypto on-ramp, according to Evolve’s webpage. Evolve Bank & Trust services several crypto-focused fintechs. Source: Evolve

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On Aug. 6, Evolve announced it fell victim to a “ransomware attack by the criminal organization, LockBit,” which accessed and downloaded “customer information from our databases and a file share during periods in February and May.” 

“We refused to pay the ransom demanded by the threat actor,” Evolve said. “As a result, they leaked the data they downloaded, ” Evolve said.

In June, the Federal Reserve Board (FRB) brought an enforcement action against Arkansas-based Evolve “for deficiencies in the bank’s anti-money laundering, risk management, and consumer compliance programs,” according to an FRB statement. The FRB is best known for setting United States monetary policy but also supervises and regulates US banks. 

“Examinations conducted in 2023 found that Evolve engaged in unsafe and unsound banking practices by failing to have in place an effective risk management framework for,” its financial technology partnerships, according to the FRB. 

“In addition, Evolve did not maintain an effective risk management program or controls sufficient to comply with anti-money laundering laws and laws protecting consumers.”

As part of the enforcement action, Evolve is required to “strengthen its risk management practices to address potential risks, including compliance and fraud risks,” the FRB said.

Magazine:Crypto-Sec: Evolve Bank suffers data breach, Turbo Toad enthusiast loses $3.6K# Blockchain# Federal Reserve# Business# Central Bank# Fintech# Adoption# Financial Services# Cybersecurity# RegulationAdd reaction