The U.S. government has launched an Inquiry into the Cryptocurrency bank that BlackRock just collaborated with last week! Here’s everything you need to know.

According to sources close to the subject, Anchorage Digital Bank, a leading cryptocurrency custody company backed by Wall Street giants, is being investigated by a financial crimes unit within the U.S. Department of Homeland Security.

The investigation conducted by the Ministry's El Dorado Task Force has reached out to former Anchorage employees in recent weeks to gather information about the company's internal practices and compliance protocols. The nature and scope of the investigation have not been officially disclosed, but the task force is known for its efforts to combat cross-border money laundering and financial crimes through proactive investigations.

Anchorage Digital, a federally authorized crypto bank, is supported by financial companies such as Goldman Sachs, Andreessen Horowitz, KKR, and Wellington Management. The company offers services such as digital asset custody and trading infrastructure for institutions and governments. Just last week, BlackRock chose Anchorage as a custodian for exchange-traded products related to crypto.

The firm had previously faced reviews. In April 2022, the Office of the Currency Auditor issued a consent order requiring (OCC) to improve Anchorage's anti-money laundering controls and enhance customer due diligence. At that time, the OCC stated that Anchorage violated the Bank Privacy Act and needed to address gaps in its compliance systems. The company responded by committing to strengthen its procedures and continues to remain under a consent order today.

The latest federal investigation came at a politically intense time for the crypto sector. Anchorage positioned itself in a key role in Washington and strengthened its ties with officials loyal to President Donald Trump, who promised to make the U.S. the "crypto capital of the world." CEO Nathan McCauley openly advocated for Trump’s digital asset agenda and played a leading role in the discussions surrounding "debanking," the practice of financial institutions cutting off services to crypto customers.

In February, McCauley testified before the Senate Banking Committee about debanking practices. More recently, he attended a White House summit on digital assets and shared a photo with Bo Hines, the executive director of the President's Council of Digital Asset Advisors, saying "Crypto is in good hands."

The company has tried to strengthen its credibility by hiring experienced regulators and financial leaders. The board of directors of Anchorage currently includes former Goldman Sachs executive Connie Shoemaker and Julie Williams, who was the chief legal advisor of the OCC during the 2008 financial crisis. The firm also recently experienced a change in its legal leadership with the departure of TuongVy Le, a former SEC crypto researcher, from her role as general counsel.

Founded in 2017 by McCauley and Diogo Mónica, Anchorage's value was last set at $3 billion in the fundraising round of 2021. In the same year, under the leadership of then OCC chairman Brian Brooks, Anchorage became the first and still the only crypto firm to receive a national bank charter from a federal regulator.