Homeland Security digital banking investigations have intensified as federal authorities probe Anchorage Digital Bank amid BlackRock custody expansion plans. The Department of Homeland Security’s “El Dorado Task Force” is contacting former bank employees about potential financial misconduct right as the crypto bank strengthens ties with Wall Street giants.

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How Homeland Security’s Probe of Anchorage Digital Bank Affects Cryptocurrency Regulation

Federal Scrutiny Returns After Previous Compliance Failures

Anchorage Digital Bank, the first federally chartered crypto bank in the US, faces investigation by Homeland Security digital banking watchdogs through their specialized El Dorado Task Force. According to Barron’s reporting, investigators have begun contacting former employees, though specific allegations remain undisclosed.

This isn’t Anchorage’s first regulatory challenge. In 2022, the Office of the Comptroller of the Currency (OCC) took enforcement action against the bank for Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) failures. The current Homeland Security digital banking probe appears to build on these ongoing compliance concerns.

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BlackRock’s Massive Crypto Exposure Creates Market Risks

Despite ongoing federal scrutiny, Anchorage Digital Bank remains deeply embedded in institutional crypto markets. The bank currently serves as primary custodian for BlackRock’s spot crypto ETFs—IBIT and ETHA—which together manage approximately $50 billion as of Q1 2025. Additionally, Anchorage acts as collateral custodian for a $2 billion digital asset financing initiative with Cantor Fitzgerald.

Arkham data confirms BlackRock currently holds 571,033 BTC worth $48.3 billion and 1.16 million ETH valued at $1.9 billion as of Tuesday. These holdings highlight the significant cryptocurrency regulation challenges that arise when major institutions depend on banks under investigation.

Potential Market-Wide Impact on Digital Asset Security

Extensive exposure of institutions like BlackRock to Anchorage suggests any negative outcome from the Homeland Security digital banking investigation could ripple through cryptocurrency markets. If Anchorage loses its banking charter or custodial credibility, institutional players might need to reassess their cryptocurrency regulation compliance and digital asset security protocols.

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While the investigation continues, outcomes will likely influence how future Altcoin ETF sponsors evaluate regulatory risks for digital asset banks operating at the intersection of cryptocurrency and traditional finance. BlackRock custody expansion plans may also face additional scrutiny as cryptocurrency regulation frameworks evolve.

The relationship between BlackRock custody expansion initiatives and crypto-focused banks is being tested as digital asset security oversight intensifies, potentially establishing important precedents for the entire industry.