Three executives have left the crypto-friendly Evolve Bank & Trust following setbacks, including a May cybersecurity breach and regulatory actions in June, according to a report by Jason Mikula of FintechBusinessWeekly.com. These events have posed significant challenges for the bank, which provides banking services to various crypto-focused financial technologies.
Executive Departures
According to the report, the bank’s chief credit officer, corporate controller, and chief lending officer for open banking have left their roles. CoinTelegraph corroborated this information through the executives’ LinkedIn accounts and the bank’s public job listings. Evolve has not yet provided comments on the matter.
Cyberattack and Aftermath
On August 6, Evolve announced that it had fallen victim to a ransomware attack by the criminal organization LockBit, which accessed and downloaded customer information from its databases and file share during periods in February and May. "We refused to pay the ransom demanded, and as a result, the criminals leaked the data they downloaded," according to Evolve.
Regulatory Pressure and Actions
In June, the Federal Reserve Board (FRB) took enforcement action against Evolve for deficiencies in its anti-money laundering, risk management, and consumer compliance programs. The FRB's statement indicated that examinations conducted in 2023 found the bank engaged in unsafe and unsound banking practices by failing to have an effective risk management framework for its financial technology partnerships. Additionally, Evolve did not maintain an effective risk management program or controls adequate to comply with anti-money laundering laws and consumer protection laws. 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 departure of executives, cyberattack, and regulatory actions have created significant challenges for the crypto-friendly Evolve Bank & Trust, highlighting the importance of robust risk management and security systems in the financial industry.
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