Banking and crypto

The case used in this module

Each module tells its own made-up Brindlecove story, so details can differ from one module to the next.

Key words

On-ramp and off-ramp

An on-ramp swaps ordinary money for crypto. An off-ramp swaps crypto back into ordinary money.¹²

Virtual asset service provider (VASP)

The FATF's name for a business that, for customers, exchanges, transfers or keeps virtual assets, among other services.¹

Customer due diligence (CDD)

The checks a bank or exchange runs on a customer: who they are, who owns them, why they want the account, and ongoing monitoring.¹³

Beneficial owner

For a US bank's company customer: each person who owns 25% or more of the company, plus one person who controls or manages it.⁴

Correspondent banking

When one bank holds deposits for other banks and provides payment services to them.⁵

De-risking

Ending or restricting relationships with whole groups of customers to avoid risk, instead of managing each customer's risk.⁶⁷

Deposit insurance

Protection for bank deposits if a bank fails. The FDIC's standard limit is $250,000 per depositor, per insured bank, for each account ownership category.⁸

Uninsured deposits

Money in a bank above the deposit insurance limit. Its owner may not get it all back if the bank fails.⁸⁹

Bank run

Many depositors pulling their money out at once because they fear the bank may fail.⁹¹⁰

Systemic risk exception

The special decision in March 2023 that let the FDIC protect all depositors of Silicon Valley Bank and Signature Bank, insured or not.¹¹¹²

Travel Rule

The FATF's wire transfer rule applied to crypto: details about the sender and receiver must pass between the providers handling a transfer.¹³¹⁴

Self-hosted wallet

A crypto wallet not held by a service provider for its owner. The FATF calls it an unhosted wallet; EU law calls it a self-hosted address.¹³¹⁵

Fedwire

The US Federal Reserve's system for large, time-critical payments between banks with a Fed account. A payment is final once processed.¹⁶

ACH

A US network through which banks send each other batches of electronic payments, such as payroll.¹⁷

SEPA

The Single Euro Payments Area, which lets people make euro payments across 41 European countries as easily as at home.¹⁸

Reputation risk

The risk that something a bank does could hurt how the public sees it, for reasons not clearly tied to its financial condition.¹⁹