TD Bank faces a $3 billion fine for violating the Bank Secrecy Act by failing to report suspicious cryptocurrency transactions linked to money laundering networks, marking the largest penalty ever imposed under the BSA.
TD Bank has been fined over $3 billion after pleading guilty to violating the Bank Secrecy Act (BSA) and facilitating money laundering, according to reports from the Financial Crimes Enforcement Network (FinCEN). The penalties, which include $1.8 billion in penalties imposed by the Department of Justice (DOJ) and $1.3 billion from FinCEN, mark the largest fine ever levied under the BSA. The fines stem from TD Bank's failure to report "suspicious activity" linked to a customer group engaging in high-risk cryptocurrency transactions.
According to FinCEN, TD Bank processed more than 2,000 transactions between July 2023 and April 2024 for a company referred to as "Customer Group C," which was involved in purported sales finance and real estate industries. Customer Group C, however, misrepresented its financial dealings and engaged in more than $1 billion in international transactions, far exceeding its stated activity limit of $1 million. The majority of the funds came from a UK-based cryptocurrency exchange, with 60% of outgoing wires directed to financial institutions in Colombia offering digital asset services.
Despite the red flags associated with high-risk jurisdictions such as Colombia, China, and the Middle East, TD Bank failed to monitor or report these suspicious activities. FinCEN’s report notes that the bank continued to process transactions for Customer Group C, including facilitating $420 million to a Colombian institution dealing with cryptocurrency services.
“TD Bank prioritized growth and convenience over following its legal obligations,” U.S. Attorney Philip R. Sellinger said in a statement. The report further emphasized that TD Bank’s failure to monitor trillions of dollars in transactions allowed money laundering networks, including international drug traffickers, to move hundreds of millions of dollars through the institution.
FinCEN criticized TD Bank for lacking a robust anti-money laundering (AML) program, particularly regarding virtual asset services. As part of the settlement, TD Bank has also agreed to a four-year monitorship to overhaul its compliance programs. TD Bank's CEO, Bharat Masrani, expressed regret for the oversight, stating that the bank would invest in its compliance and risk management systems to prevent such failures in the future.
