TD Bank has agreed to pay a $3 billion fine after being accused of helping criminals "conceal" more than $670 million.
TD Bank hit with a record $3 billion fine for money laundering. Image: Blockworks
The Financial Crime Enforcement Network (FinCEN) of the U.S. Department of the Treasury accused TD Bank of "concealing" suspicious cryptocurrency transactions, as the bank was fined $3 billion for money laundering.
The U.S. authorities' investigation uncovered numerous serious violations. Specifically, TD Bank processed over 2,000 transactions from a customer group called "Customer Group C" within 9 months. This group initially operated in the financial sales and real estate sectors, but deceived TD Bank by claiming their international transactions would not exceed $1 million per year, when in reality they were much higher.
90% of Customer Group C's funds came from a cryptocurrency exchange in the UK, and 60% of the money they transferred was sent to financial institutions in Colombia, also related to digital asset services. Customer Group C did not disclose to TD Bank that Colombia was a country they would be transacting with, and they continued to work with many "high-risk" industries and companies in China and the Middle East.
FinCEN pointed out that despite the many suspicious transactions, TD Bank did not report them until receiving a request from the authorities. Furthermore, although TD Bank had policies related to digital asset transactions, there was no evidence that they had implemented any control measures for the large transactions of Customer Group C with virtual asset service providers.
TD Bank is currently the second-largest bank in Canada and the 10th largest in the U.S. by assets. The bank is known for its commitment to providing the most convenient customer experience and is a pioneer in digital technology applications. The investigation is still ongoing, and there is a possibility of additional individuals being prosecuted.
On October 10th, TD Bank officially pleaded guilty to violating the Bank Secrecy Act and money laundering, and agreed to pay over $3 billion in fines to U.S. authorities. This is the first time in U.S. history that a bank has admitted to this behavior, and the amount is considered the "largest penalty ever under the BSA".
According to the U.S. Department of Justice, TD Bank had "systemic deficiencies" in its anti-money laundering program from 2018 to 2024. These vulnerabilities allowed three criminal networks to launder more than $670 million through the banking system. U.S. Attorney General Merrick B. Garland stated:
"TD Bank chose profits over compliance, in order to keep its costs down. That decision is now costing the bank billions of dollars in criminal and civil penalties."
"TD Bank chose profits over compliance, in order to keep its costs down. That decision is now costing the bank billions of dollars in criminal and civil penalties." - Attorney General Merrick B. Garland pic.twitter.com/MeTwLHd1h0
— U.S. Department of Justice (@TheJusticeDept) October 11, 2024
The case is having a serious impact on TD Bank's business operations. The bank's stock has plummeted following this news. The bank has also been forced to cancel its $13.4 billion acquisition of First Horizon.
Compiled by Coin68
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