FinCEN fines TD Bank $3 billion for failing to report $420 million in suspicious cryptocurrency transactions linked to high-risk regions.
The U.S. Financial Crimes Enforcement Network (FinCEN) has fined TD Bank $3 billion for violating anti-money laundering (AML) regulations. This penalty follows an investigation that revealed the bank failed to report suspicious cryptocurrency transactions involving over $420 million. These funds were transferred to cryptocurrency service providers in high-risk regions, particularly Colombia.
TD Bank is one of Canada’s largest banks and operates in the United States, serving millions of customers. During a larger probe into whether the bank had complied with AML laws, FinCEN found that TD Bank had not reported “suspicious activity” linked to cryptocurrencies. Therefore, the investigation centred on the fact that the bank had not reported on these transactions.
TD Bank Fined Over Crypto Transfers Tied to Colombia and China
From the consent order, it was agreed that TD Bank was handling transactions of an unknown entity that was termed “Customer Group C.” This group has been transferring large amounts of money, more than $420 million, to a Colombian financial institution that provides cryptocurrency services. These transactions were associated with high-risk countries, including Columbia, China, and several Middle Eastern countries. In addition, Customer Group C was identified to have made more than $100 million in wire transfers each month, primarily in connection with trading.
From July 2023 to April 2024, Customer Group C’s total transactions were over 1 billion US dollars. More importantly, 90% of these fund deposits came from a specific UK-based cryptocurrency exchange, and 60% of the fund transfers went to a particular Colombian-based financial institution. In addition, Customer Group C received more than 650 million dollars from an international cryptocurrency exchange platform. However, the particular platform was not named in the report.
The lack of specific cryptocurrency controls explains why the bank did not report such transactions. It was also revealed that TD Bank had some policies that were insufficient to monitor virtual asset transactions effectively. Consequently, Customer Group C did not have stronger control over the large transactions as would have been expected.
Finally, TD Bank did not disclose the suspicious activity until the LEAs inquired about it several times. In response, the bank pleaded guilty to the AML violations and agreed to pay a hefty fine of $3 billion. Of this amount, $1.3 billion will be directed to FinCEN. This case underscores the increasing concerns around cryptocurrency and highlights the importance of stronger regulations within the financial industry.
