TD Group Did Not Disclose “Suspicious” Crypto Activity, FinCen Says

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Julia Smith

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October 13, 2024

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A new Financial Crime Enforcement Network (FinCEN) report alleges TD Bank did not disclose “suspicious activity” involving two international crypto exchanges.

Crypto Exchanges Involved With TD Bank, FinCEN Report Shows

According to the October 10 report, TD Bank processed over 2,000 transactions between July 2023 and April 2024 for an anonymous financial firm, “Customer Group C,” valued at over $1 billion.

90% of those funds reportedly came from a cryptocurrency exchange based in the United Kingdom, while 60% of outgoing wires were sent to a Colombian financial institution offering digital asset services.

“The pattern of activity revealed Customer Group C conducted, on average, over $100 million in wire transfers each month, most of which facilitated apparent third-party cryptocurrency trading and involved high-risk industries and jurisdictions, including Colombia, China, and countries in the Middle East,” FinCEN stated. “Yet this significantly deviated from Customer Group C’s onboarding documentation, which did not identify Colombia or China as jurisdictions through which cross-border transactions were expected to be processed.”

The financial regulating body further states that Customer Group C acquired $650 million from an international cryptocurrency exchange platform “where the purpose, ultimate originators, and source of funds were unknown to TD Bank.”

“Despite this high volume of funds from unknown sources, TD Bank continued to process transactions for Customer Group C, including the facilitation of over $420 million to a financial institution offering cryptocurrency services in the high-risk jurisdiction of Colombia,” the report continued.

Despite lacking a regulatory framework surrounding digital assets, FinCEN noted that “the limited high-level written policies the bank had in place relating to virtual assets alluded to the requirements for certain additional controls and monitoring.”

The bank then “failed to proactively report this suspicious activity” until after it had received “multiple law enforcement inquiries about Customer Group C.”

TD Banks Pays Up

News of the report comes nearly one week after the financial institution pleaded guilty to violating anti-money laundering provisions.

TD Bank agreed to pay a $3 billion fine as part of its settlement with the federal regulator.

“TD Bank prioritized growth and convenience over following its legal obligations,” U.S. Attorney Philip R. Sellinger for the District of New Jersey said in an October 10 statement. “As a result of staggering and pervasive failures in oversight, it willfully failed to monitor trillions of dollars of transactions – including those involving ACH transactions, checks, high-risk countries, and peer-to-peer transactions – which allowed hundreds of millions of dollars from money laundering networks to flow through the bank, including for international drug traffickers.”