The Financial Crimes Enforcement Network (FinCEN) has imposed a $1.3 billion fine on TD Bank (TSE: TD) for widespread violations of the Bank Secrecy Act, including significant failures in monitoring cryptocurrency-related transactions.
In a consent order released on October 10, FinCEN detailed how TD Bank processed over $1 billion in suspicious transactions linked to cryptocurrency exchanges over nine months from July 2023 to April 2024. The bank failed to properly monitor or report this activity, despite clear discrepancies with customer-provided information.
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The case involved a group of customers, identified as “Customer Group C,” who claimed to operate in the sales finance and real estate industries. These customers informed TD Bank that their wire activity would not exceed $25,000, with annual sales below $1 million. However, they conducted over $1 billion in transactions through TD Bank, with more than 90% of incoming funds originating from a UK-based cryptocurrency exchange.
Additionally, over 60% of outgoing transactions were sent as wires to a Colombian financial institution offering virtual asset-related services. This pattern of high-volume, cross-border cryptocurrency-linked transactions significantly exceeded the customers’ stated business activities and expected transaction levels.
FinCEN’s order highlighted TD Bank’s lack of clear controls for customers dealing in cryptocurrency. While the bank had some high-level policies relating to virtual assets, there was no evidence of enhanced monitoring or controls applied to these high-risk transactions.
The consent order requires TD Bank to significantly enhance its anti-money laundering (AML) program, including improved monitoring of cryptocurrency-related transactions and customers involved in virtual asset services.
The bank has agreed to retain an independent monitor for four years and conduct a comprehensive review of potentially suspicious transactions dating back to 2018.
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