TD Bank’s US arm has been hit with a $3 billion fine, following allegations of improper monitoring of suspicious transactions involving two unnamed cryptocurrency platforms based in the United Kingdom and Colombia. According to a report by the Financial Crimes Enforcement Network (FinCEN) on 10 October, the bank facilitated more than $1 billion in transactions linked to these platforms.
Crypto Firms Linked to Large Bank Transfers
FinCEN revealed that an unnamed customer group referred to as “Customer Group C,” conducted over $1 billion in transactions through TD Bank. Over 90% of the incoming funds originated from a UK-based cryptocurrency exchange, while 60% of outgoing transactions were sent to a Colombian financial institution offering virtual asset services. Customer Group C, which claimed to operate in the “sales finance and real estate industries,” allegedly facilitated third-party cryptocurrency trading in high-risk jurisdictions like Colombia, China, and parts of the Middle East.
Consent order imposing civil money penalty. Source: FinCEN
Unknown Origins of Funds Raise Concerns
Despite the significant volume of wire transfers—more than $100 million per month—TD Bank failed to scrutinize the origins and purpose of the funds. The FinCEN report noted that Customer Group C received over $650 million from an international crypto exchange, with the bank unaware of the ultimate originators or sources of the funds. Additionally, over $420 million was transferred to a Colombian financial institution involved in cryptocurrency services.
TD Bank’s Previous Foray into Crypto Ends in 2023
TD Bank briefly explored the cryptocurrency market through its subsidiary TD Cowen, which launched Cowen Digital in March 2022. The crypto unit provided institutional clients access to digital assets like Bitcoin and Ether. However, TD Cowen’s crypto division was closed in June 2023, just three months after TD Bank acquired Cowen Bank. The reason for the closure remains undisclosed, although it coincided with a turbulent period for the crypto industry and the wider US banking sector.
TD Bank’s regulatory troubles highlight the growing scrutiny of financial institutions involved in the cryptocurrency sector, particularly in high-risk regions.
