Tag: banks

Major US Banks Are Detecting Unauthorized AI Agents Accessing Customer Accounts

America’s largest banks are scrambling to defend themselves against a new and rapidly evolving security threat: artificial intelligence agents gaining access to customer accounts, sometimes behaving in ways that appear to go beyond what their human users originally authorized, according to Axios.

Major financial institutions including JPMorgan Chase, Bank of America, Morgan Stanley, Wells Fargo and Citigroup are confronting the growing presence of third-party AI assistants inside their banking platforms. Some institutions have detected unauthorized agent activity, while others are concerned about cases in which AI systems appear to initiate actions without explicit instructions from account holders.

The problem is becoming particularly difficult because banks cannot always distinguish between a legitimate customer accessing an account, an AI assistant acting with that customer’s permission, and a potentially rogue agent operating outside its intended authority.

In many cases, customers themselves are providing AI tools with their banking credentials so the software can perform financial tasks on their behalf. While those arrangements may be voluntary, they frequently violate bank policies requiring account holders to maintain control of their login information.

More troubling is what happens once an AI agent gains access. Depending on the permissions it has been given, an assistant could potentially initiate purchases, transfer money or perform other financial transactions. Bank executives are increasingly concerned about the possibility of these systems making consequential decisions without adequate human oversight.

The Axios report out Thursday morning reported instances of agents interacting with bank call centers, as well as activity suggesting that certain systems may have attempted to act independently of their users’ instructions. The developments have prompted several Wall Street institutions to begin tightening access to their platforms.

Morgan Stanley has reportedly started blocking third-party AI agents, while JPMorgan, Bank of America and Citigroup have also moved to restrict their activities. A Chase spokesperson cautioned customers against sharing account usernames and passwords, while Morgan Stanley said it had not identified instances of rogue AI agents accessing its systems.

The industry is not necessarily opposed to AI-powered financial assistants altogether. In fact, many banks already permit limited, read-only access to customer information through authorized third-party applications, including budgeting and personal finance software.

That model could provide a compromise for AI agents, allowing them to analyze balances, review transactions and help customers manage their finances without granting them the authority to actually move money.

But even that distinction is becoming more complicated as AI systems grow increasingly autonomous.

Banking executives acknowledge that consumers will likely demand more sophisticated AI assistants capable of handling financial tasks in the future. The challenge is developing safeguards that allow those capabilities without exposing customers to unauthorized transactions, compromised accounts or unpredictable automated behavior.

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Situational Unawareness: Banks Ran Out Of Room To Lever Up The AI Trade, So They Made More

When a bank runs out of room to lend to hedge funds piling into the most crowded trade on the planet, there are two options: stop lending, or find more room. Barclays found more room…

According to a Bloomberg exclusive published Tuesday, Barclays (BARC) executives wanted extra capacity to lend more aggressively to hedge fund clients as Asian AI stocks went vertical earlier this year. The fix: the bank’s macro rates traders ended up lending part of their own capital allocation to the prime financing business through an internal auction. The reason they had to: over the summer Barclays had reached its maximum limits on how much financing it could extend to hedge fund clients in Asia. Bloomberg’s verdict: Barclays and its peers are “finding ways to meet demand, despite bumping up against internal constraints.”

In other words, the internal risk limits did their job, flagged that the bank had lent enough… and the bank responded by moving the goalposts.

“Disciplined”… Right Up To The Limit

The pitch inside Barclays, per Bloomberg’s sources, was simple: allocate more balance sheet to higher-returning businesses like prime brokerage (housed in the global markets unit run by Adeel Khan) given the “huge growth” expected in Asian tech stocks. Rates traders, whose returns on balance sheet don’t look nearly as sexy as financing Korean memory stocks at peak euphoria, became the donors.

Barclays’ official line:

“We deploy our investment bank balance sheet dynamically, responding to client opportunities while maintaining a disciplined approach to risk and returns.”

Translation: we found a client opportunity, and we deployed dynamically. Meanwhile, the “disciplined” part kicked in only after the limit was hit.

Regular readers will recall that the Bank of England had already started poking around exactly this corner of the market just as the AI trade was cracking in July.

And as we noted when regulators finally found their situational awareness (Sep 24), the BoE is specifically looking at the rapid growth of London prime brokers financing Asian equities this year, after names like SK Hynix went vertical. London prime brokers financing Asian equities… it’s almost as if someone had a specific bank in mind.

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SPLC largely drove debanking of conservative groups, Treasury report shows

Arecent report from the Office of the Comptroller of Currency (OCC) in the Treasury Department shows that the Southern Poverty Law Center (SPLC) was a driving force behind the debanking of conservative groups prior to its indictment.

The SPLC is a left-wing anti-racism advocacy group that has faced scrutiny from conservatives for years over its alleged bias against them and penchant for labeling mainstream political figures on the right as “extremists.”

The group has also faced withering criticism from the left, such as Ken Silverstein, who followed its expelled founder Morris Dees for years for Harper’s and The New Yorker.

The Department of Justice (DOJ) has charged the SPLC with allegedly defrauding donors by paying exorbitant sums to members of extremist groups, both to act as informants and to recruit and expand their operations.

The SPLC has denied wrongdoing in the case, and said in a statement that “The charges against the SPLC are provably wrong; they are based on inaccurate facts and a misapplication of law. Our informant program was successful in accomplishing its purposes: Threats and attacks were prevented, criminal activity was stopped, and information was gathered to dismantle the efforts of hate and extremist groups.”

The OCC report, released last week, detailed the efforts of financial applications, banks, and other institutions to deny service to conservative organizations, particularly highlighting the SPLC’s role. Many of the groups the report documented had been labeled as hate groups by the organization. Driving much of the effort were broad reputational risk policies that the OCC generally swept up many mainstream conservative groups.

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Belarus Approves the Country’s First Crypto Banks: Report

Belarus earlier this year signed a legal framework for crypto banks in the country.

The first crypto banks have opened in Belarus, according to reports, after the European country earlier this year created a legal framework for Bitcoin banks.

While not yet named, the crypto banks will start operations after obtaining accreditation from the National Bank of Belarus, Russian news agency Interfax reported Monday.

Back in January, Belarusian President Alexander Lukashenko signed Decree No. 19 “On Cryptobanks and Certain Issues of Control in the Field of Digital Tokens,” officially creating a legal framework for bitcoin and crypto banks in the country.

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EBA designates Circle’s USDC as the EU’s first ‘significant’ e-money token

The European Banking Authority said Wednesday that it has classified USDC as a “significant” e-money token under the Markets in Crypto Assets Regulation, making it the first of the 45 EMTs notified in the bloc to meet that threshold.

According to an official statement, the EBA will now take direct responsibility for supervising USDC’s own funds, reserve assets, liquidity requirements, and recovery and redemption plans from Nov. 12. These areas are currently overseen by France’s Autorité de Contrôle Prudentiel et de Résolution (ACPR), but the regulator will still handle governance, qualifying holdings, fit and proper assessment, and conflicts of interest after the EBA takes over.

The EBA also said it signed a memorandum of understanding with the New York State Department of Financial Services, which oversees Circle’s New York-regulated operations. The MoU will facilitate cross-border oversight and information exchanges between the two authorities.

USDC is the world’s second-largest stablecoin, with a supply of nearly $73 billion, according to The Block’s data dashboard. Tether’s USDT leads the market with $184 billion in circulation, against a total supply of $294 billion for dollar-pegged stablecoins.

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Bombshell Report: Big Banks Debanked ‘MAGA’ And The Left’s Other Political Enemies

The Timothy Two Project International’s mission is to do as the Apostle Paul instructed his protege Timothy: Teach others to teach the Gospel. TTPI has for more than 15 years reached indigenous pastors in some 70 countries — in some of the more impoverished places on Earth where there is little or no formal biblical and theological training available. 

In 2020, Bank of America canceled the nonprofit’s account, an account the Timothy Two Project had held since 2011. Suddenly, inexplicably, TTPI was “operating a business type we have chosen not to service,” according to the financial services titan. 

Steve Curtis, TTPI’s international director, explained in the Washington Examiner in 2023 that the notice came out of the blue. 

“We opened our Bank of America account in 2011, and used it to make small grants and pay our largely U.S.-based staff members. Our ministry focus has stayed consistent in whatever may qualify as a ‘business type’ since we started our bank account, and we are accredited with the Evangelical Council for Financial Accountability,” Curtis wrote. “So we were surprised and confused by the bank’s decision.”

Major financial institutes were “debanking” all manner of right-of-center individuals and organizations during the Biden years, a scary era of prosecution and persecution of the left’s political enemies. 

Bank of America, JPMorgan Chase, U.S. Bank, Citibank, Wells Fargo, and several other mammoth U.S. financial institutions cited “reputation risk” in denying service to American consumers between 2020 and 2025, according to a damning new report issued by the Office of the Comptroller of the Currency (OCC). The 45-page report titled, “Debanked: Guaranteeing Fair Banking for All Americans,” is an indictment on the left’s cancel culture fury and the Goliath banks that were “willing or unwitting accomplices” in the sweeping silencing treatment, said Jeremy Tedesco, special counsel for Alliance Defending Freedom.

‘Now We Have the Goods’

ADF and other First Amendment defenders had for years warned of a growing debanking effort targeting “disfavored” organizations and industries — aka the left’s ideological enemies. Tedesco said critics scoffed. They said the red flag raisers “didn’t have the goods.” 

“Well now we have the goods,” the civil rights attorney says in an upcoming episode of The Federalist Radio Hour. “We have the biggest banking regulator in the U.S. government saying, ‘This is happening, and it’s happening at a wide scale at the biggest banks in the country.’”

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US Hits Bank of America With $1.2 Billion in Penalties for Security Violations

The U.S. Treasury fined Bank of America $1.21 billion for violations of anti-money laundering and sanctions laws, the department announced Oct. 13.

The Financial Crimes Enforcement Network assessed the penalty for the bank’s failure to mitigate and report priority national security risks, including Chinese money laundering networks and illicit finance along the southwest border, according to the Treasury.

“When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls, exposing the entire U.S. financial system to significant illicit finance risks,” Treasury Secretary Scott Bessent said.

Bank of America is the second-largest bank in the United States and the sixth-largest in the world, according to the Office of the Comptroller of the Currency (OCC), a treasury bureau that regulates and supervises banks and financial institutions.

“Every year, [Bank of America] processes hundreds of trillions of dollars in transactions across the globe,” Comptroller of the Currency Jonathan Gould said in a statement. “It has a high—and increasing—risk profile for money laundering, terrorist financing, and other illicit activities.”

Almost two years ago, the bank signed an order with the agency and committed to fixing problems found in its compliance with the federal Bank Secrecy Act, Gould said.

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American Express Hit With $350 Million Fine For Anti-Money Laundering Lapses

American Express has been ordered to pay a $350 million penalty over what federal regulators described as “critical deficiencies” in its anti-money laundering controls.

The regulators said it missed about $13 billion in suspected activity over more than a decade.

The Office of the Comptroller of the Currency announced the civil penalty and a cease-and-desist order on Thursday against American Express National Bank, the Utah-based banking subsidiary of the credit-card company.

The Federal Reserve separately issued a concurrent enforcement action against parent company American Express and its subsidiaries, citing significant deficiencies in the company’s enterprise-wide anti-money-laundering compliance program.

According to the OCC, American Express National Bank failed to tailor its federally mandated anti-money laundering risk assessment to the way it actually did business.

The regulator said the bank focused too much on its “relatively narrow” demand deposit account products and services while not giving enough attention to the risks associated with its “more dominant” credit and charge card products.

The bank also experienced what the OCC described as “systemic breakdowns” in its processes for monitoring and reporting suspicious activity.

Those deficiencies led to failures to identify and report roughly $13 billion in suspected trade-based money-laundering activity, including card charges and repayments associated with those charges, according to the OCC.

Trade-based money laundering generally involves using commercial transactions to disguise the proceeds of crime or move illicit value, including through manipulating the price, quantity, or quality of goods involved in trade.

In some cases, the transactions involved accounts associated with bank insiders, according to the OCC.

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Why banks and offshore hubs like Dubai are winners of the Senate killing the Clarity Act

One expert believes that the failure to pass the bill is a win for the banks that staunchly oppose stablecoin yields, while a global crypto lawyer believes overseas jurisdictions benefit.

U.S. banks and overseas crypto hubs such as the United Arab Emirates (UAE) stand to benefit after the Senate failed to advance the Clarity Act last week, according to lawyers and industry experts.

The Clarity Act’s 49-50 Senate cloture vote means the crypto industry will not get the federal market structure framework it had sought. Instead, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) will continue to shape policy through existing rules, interpretations and exemptions.

The legislative battle over the bills was not only about crypto oversight, but it also exposed a struggle over whether stablecoin platforms could offer rewards that might compete with bank deposits, as well as ethical considerations for people in government.

“Banks won this round. But the reason they are fighting so hard is that banks increasingly see stablecoins as competition for deposits, not just as another crypto product,” said Anton Golub, head of exchange go-to-market at Forte, in a Telegram message.

The immediate outcome of the failure to pass the law is that crypto regulations in the United States will continue to be created outside Congress. The SEC moved quickly after the vote, issuing a temporary conditional exemption that allows eligible venues to trade tokenized U.S. stocks through permissioned liquidity pools on public blockchains.

Soon after, the CFTC sent crypto rules to the White House for review. The agency submitted a new proposal; the details were not disclosed. For now, which crypto assets it contemplates, what exchanges would need to do to qualify for licenses, what restrictions would apply and how far the agency believes its authority extends, remains unclear. All the meanwhile, the “Clarity Act is dead, at least for now,” Jesse Hamilton, CoinDesk’s deputy managing editor in charge of global policy and regulation, wrote in an analysis that explains what very few appear to know: what the Clarity Act actually is.

“While the U.S. continues debating the Clarity Act, in the UAE we actually have clarity,” Irina Heaver, a Dubai-based crypto lawyer and founder of NeosLegal, said via Telegram. More than 110 regulated virtual-asset businesses operate in the country, with about 20 more holding in-principle approvals, she added.

“Every additional year that major markets spend debating how crypto should be regulated gives jurisdictions that have already created functioning regulatory frameworks another year to attract businesses, founders, talent and capital,” she said. “Regulatory clarity is no longer just a legal issue. It is a competitive advantage for the country.”

Kyle Bligen, executive director at the Decentralization Research Center, said “Congress remains the best route to a comprehensive market structure framework.” He said the Senate’s vote “was disappointing, but it does not change the underlying problem: digital assets still need clear and durable rules.”

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British Banking Whistleblower Who Exposed Lutnick’s Epstein Ties Dies; Ruled Suicide

A British banking whistleblower who helped uncover previously undisclosed ties between Commerce Secretary Howard Lutnick and convicted sex offender Jeffrey Epstein has died at 57, The Banker reports.

Simon Andriesz, a veteran of the financial industry who previously served as a managing director at BGC Group, emerged as a key figure in scrutinizing Lutnick’s past contacts with Epstein after digging through the massive trove of documents released in connection with the disgraced financier.

Andriesz’s death was confirmed by Andy Agathangelou, founder of the Transparency Task Force, where Andriesz had previously spoken about his experiences as a whistleblower.

“It is with great sadness that we share the news that Simon Andriesz, a valued member of our community, passed away last week,” Agathangelou said in a statement obtained by The Banker, which reports that he died by suicide.

Andriesz made headlines after uncovering documents that raised fresh questions about Lutnick’s past relationship with Epstein.

Among the records was a 2018 email exchange in which Lutnick and Epstein discussed a startup in which both men had an interest, according to the BBC.

The revelation drew particular attention because Lutnick had previously portrayed his relationship with Epstein as having ended years earlier.

Andriesz brought his findings to members of the House Oversight Committee before Lutnick appeared before lawmakers in May, putting the veteran banker at the center of renewed scrutiny surrounding the Epstein files.

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