TD Bank’s recent meltdown could have ties to two unnamed cryptocurrency firms in Colombia and the United Kingdom.
On Oct. 10, TD Bank’s US wing agreed to pay more than $3 billion in penalties, while accepting limits on its US growth trajectory, settling charges related to improper monitoring of money laundering by criminal groups.
According to an Oct. 10 report by the Financial Crimes Enforcement Network (FinCEN), more than $1 billion worth of TD Bank’s transfer volume was related to two unknown cryptocurrency firms. The transactions were conducted by an unknown firm, identified only as “Customer Group C,” which purportedly operates in the “sales finance and real estate industries.”
The FinCEN report states the following:
“Customer Group C conducted over $1 billion in transactions through TD Bank during the relevant period, with over 90% of the incoming funds from a UK-based cryptocurrency exchange and more than 60% of outgoing transactions sent as wires to a Colombian financial institution that also offers virtual asset-related services.”
Consent order imposing civil money penalty. Source: FinCEN
According to FinCEN, the above-mentioned customer group conducted an average of over $100 million worth of monthly wire transfers, most of which “facilitated apparent third-party cryptocurrency trading,” in “high-risk” jurisdictions such as Colombia, China, and countries in the Middle East.
TD Bank facilitated over $650 million in transactions from an international crypto exchange
TD Bank has facilitated over $650 million worth of bank transfers for “Customer Group C,” received from an international cryptocurrency exchange.
According to FinCEN, this type of volume “significantly deviated” from the customer group’s onboarding documentation. The report added:
“During this time, Customer Group C received more than $650 million from an international cryptocurrency exchange platform, where the purpose, ultimate originators, and source of funds were unknown to TD Bank.”
Despite the unknown origins of the funds, TD Bank continued processing transactions, including the facilitation of over $420 million to a “financial institution offering cryptocurrency services in the high-risk jurisdiction of Colombia.”
TD Bank closed its previous crypto unit in 2023
TD Bank previously dabbled in the cryptocurrency space for a short period. TD Cowen, a US independent investment bank, launched Cowen Digital in March 2022 to provide institutional clients exposure to the crypto market via 16 crypto assets, including Bitcoin (BTC) and Ether (ETH).
TD Cowen’s crypto unit was shut down in June 2023, without disclosing the reason behind its closure.
The Cowen Bank was acquired by TD Bank Group for $1.3 billion in August 2022, in a deal completed in March 2023, three months before the crypto wing was shut down.
The closure came amid several crypto company collapses last year, alongside the US banking and regulatory crisis in 2023.
Silvergate collapse: What does it mean for crypto? Source: YouTube
Magazine: Will Satoshi be doxxed? Banks to join SWIFT digital asset trials and more: Hodler’s Digest, Sept. 29 – Oct. 4
