FinCEN accuses TD Bank of failing to report suspicious crypto activity involving over $1 billion in transactions

The U.S. Financial Crimes Enforcement Network (FinCEN) said that banking giant TD Bank failed to report suspicious activities from an anonymous customer group that processed international cryptocurrency transactions. FinCEN said that TD Bank processed more than 2,000 transactions from a company called "Customer Group C" over a period of nine months, which was identified as "purportedly operating in the sales financing and real estate industries." The group lied to TD Bank about their plans for international wire transfer activities, claiming that their annual sales would not exceed $1 million. In fact, it conducted more than $1 billion in transactions through TD Bank. In addition, the group received 90% of the funds from a British cryptocurrency exchange and sent 60% of the funds to Colombian financial institutions to provide services related to digital assets. When it joined TD Bank, it did not list Colombia as one of the jurisdictions it would deal with, but continued to work with "high-risk industries and companies" in Asia and the Middle East. “Despite the presence of ‘red flags’ associated with a large number of suspicious transactions and high-risk jurisdictions, as well as the rapid movement of funds over a short period of time, TD Bank failed to proactively report this suspicious activity until it received multiple law enforcement inquiries regarding Customer Group C,” FinCEN wrote in the report. FinCEN added that while TD Bank had some written policies regarding transactions involving digital assets, “there was no evidence that any enhanced controls were implemented regarding Customer Group C’s extensive dealings with virtual asset service providers.” (The Block) Last week, U.S. Attorney General Merrick B. Garland announced in Washington that TD Bank, one of the largest financial institutions in the United States, had pleaded guilty to multiple felony charges, including conspiracy to violate the Bank Secrecy Act and money laundering. In his statement, Garland confirmed that TD Bank had agreed to accept a $1.8 billion criminal fine, which, combined with civil enforcement actions, brings the total penalties against the bank to approximately $3 billion. He noted that the resolution includes “the largest penalty ever imposed under the Bank Secrecy Act and the first time the Department of Justice has assessed a daily penalty against a bank.”