TD Bank, one of the largest financial institutions in the United States, has come under intense scrutiny in the cryptocurrency space after suffering the largest penalty ever imposed under the Bank Secrecy Act (BSA).
The $3.09 billion fine stems from allegations of failure to report suspicious activity, including significant transactions related to cryptocurrencies.
US Department of Justice (DOJ) and Financial Crimes Enforcement Network (FinCEN) open That TD Bank processed billions of dollars through questionable accounts, raising concerns about the bank’s compliance practices in dealing with digital assets.
What really went wrong?
In a report, FinCEN noted that TD Bank failed to properly monitor transactions for a particular customer called “Customer Group C.” The unnamed company, which claims to be in the sales and real estate financing business, allegedly misled TD Bank about the size and nature of its international transactions.
While Client Group C initially said it would process transactions worth less than $1 million annually, the company has processed more than $1 billion through TD Bank, most of which involved cryptocurrency. This discrepancy, as well as links to high-risk jurisdictions, has drawn the attention of US authorities.
According to findings by FinCEN, the banking giant processed more than 2,000 Group C customer transactions in just nine months. The company obtained 90% of its funds from a UK-based cryptocurrency exchange and sent 60% to Colombian financial institutions involved in digital assets.
Client Group C’s activities went well beyond what they initially announced while joining TD Bank, and they expanded their dealings into high-risk regions such as China and the Middle East.
Despite these suspicious transactions and red flags related to risky jurisdictions and rapid money movements, TD Bank reportedly failed to report these transactions promptly. After receiving numerous law enforcement inquiries about Customer Group C, the bank only began reporting the activity.
FinCEN noted that TD Bank has some internal policies to monitor transactions involving digital assets, but those controls were not adequately applied in this case. As a result, millions of dollars in suspicious cryptocurrency transactions went unreported for months.
Punishment
As of last week Thursday (October 10), TD Bank plead guilty For violating the Bank Secrecy Act and money laundering laws. The bank agreed to pay $1.8 billion in fines as part of a settlement with the Department of Justice, and FinCEN imposed an additional fine of $1.3 billion.
According to the report, the combined fine of $3.09 billion represents the largest penalty ever imposed under the confidentiality law. As part of the agreement, TD Bank will also… He faces probation for four years To ensure that they implement better compliance measures in the future.
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