The Financial Crimes Enforcement Network (FinCEN) has alleged that banking giant TD Bank failed to report suspicious activity from an anonymous group of customers handling international cryptocurrency transactions.
FinCEN found that over a nine-month period, TD Bank processed more than 2,000 transactions from a company known as “Customer Group C,” which it identified as “known to operate in the sales finance and real estate industries.” Customer Group C misrepresented its intended international remittance activity to TD Bank by stating that its annual revenue would not exceed $1 million. In fact, Customer Group C reportedly made over $1 billion worth of transactions through TD Bank.
Additionally, Customer Group C sourced 90% of its funds from UK-based cryptocurrency exchanges and sent 60% of its funds to Colombian financial institutions through digital asset-related services. Client Group C did not list Colombia as part of the jurisdictions it would deal with while joining TD Bank, and also continued to work with “high-risk industries and companies” in China and the Middle East.
“Despite the presence of numerous suspicious transactions and ‘red flags’ associated with high-risk jurisdictions and rapid movement of funds within a short period of time, TD Bank proactively identified this suspicious activity until after multiple law enforcement investigations of Customer Group C. failed to report to ,” FinCEN wrote in the report.
FinCEN added that while TD Bank has some written policies on digital asset transactions, “there is no evidence that the enhanced controls have been applied to its broader transactions with Customer Group C and virtual asset service providers.”
On October 10, TD Bank pleaded guilty to violating the Bank Secrecy Act and money laundering and will be fined $1.8 billion, according to the U.S. Department of Justice. FinCEN also fined TD Bank $1.3 billion and imposed a four-year surveillance order for the same violations. The $3.09 billion has been called “the largest fine ever levied by the BSA.”
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About the author
MK Manoylov has been a reporter for The Block since 2020, joining just before Bitcoin surpassed $20,000 for the first time. Since then, MK has written nearly 1,000 articles for publications covering all cryptocurrency-related news, preferring NFTs, metaverse, web3 games, fundraising, crime, hacking, and cryptocurrency ecosystem stories. MK holds a graduate degree from New York University’s Science, Health, and Environmental Reporting Program (SHERP) and has also covered health topics for WebMD and Insider. X You can follow MK at @MManoylov and on LinkedIn.