TD Bank failed to disclose ‘suspicious’ crypto transactions tied to unnamed customer group

As part of a larger investigation into TD Bank’s transactions and adherence to anti-money laundering laws, a FinCEN investigation found that the traditional finance bank failed to disclose “suspicious activity” regarding crypto.

A consent order alleges that the bank processed transactions for “Customer Group C,” which is an unknown entity, “including the facilitation of over $420 million to a financial institution offering cryptocurrency services in the high-risk jurisdiction of Colombia.”

There was a pattern, FinCEN said, of Customer Group C doing over $100 million in wire transfers a 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.”

Customer Group C saw transactions top $1 billion in a period of time from July 2023 to April 2024, the order found. Ninety percent of that came from an unnamed crypto exchange, though this one was UK-based. Sixty percent of the outgoing transactions went to a Colombian financial institution — again unnamed.

The group was also tied to an “international cryptocurrency exchange platform,” the order states, and received over $650 million from it. However, it’s not clear which platform FinCEN is referring to.

“TD Bank processed these transactions on behalf of Customer Group C, due in part to a lack of clear controls applicable to customers dealing in cryptocurrency: 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 order claims.

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“However, there is no evidence any enhanced controls were ever applied to Customer Group C’s extensive transactions with virtual asset service providers.”

The bank failed to report the activity until it received “multiple law enforcement inquiries” about the unnamed entity.

Last week, TD Bank pleaded guilty to AML violations, paying a hefty fine of $3 billion in penalties. Of that sum, $1.3 billion went to FinCEN according to the order filed with the government office.

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