FinCEN claims that TD Bank handled bank payments totaling more than $1 billion from two foreign cryptocurrency sites.
There may be connections between the recent collapse of TD Bank and two anonymous Bitcoin companies in the UK and Colombia.
On October 10, TD Bank’s US division settled charges about unlawful money laundering monitoring by criminal organizations by agreeing to pay more than $3 billion in penalties and accepting restrictions on its US growth trajectory.
Two unidentified companies accounted for more than $1 billion of TD Bank’s transfer activity, according to a report released by the Financial Crimes Enforcement Network (FinCEN) on October 10. An unidentified company, known as “Customer Group C,” which allegedly works in the “sales finance and real estate industries,” carried out the transactions.
The following is stated in the FinCEN report:
“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.”
According to FinCEN, the customer group above carried out over $100 million in monthly wire transactions, most of which “facilitated apparent third-party cryptocurrency trading” in “high-risk” jurisdictions like China, Colombia, and Middle Eastern nations.
An international cryptocurrency exchange sent over $650 million transactions to TD Bank.
For “Customer Group C,” TD Bank processed bank transfers totaling more than $650 million obtained via a foreign cryptocurrency exchange.
FinCEN claims that this volume “significantly deviated” from the onboarding guidelines provided to the customer group. The study additionally stated:
“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.”
A “financial institution offering cryptocurrency services in the high-risk jurisdiction of Colombia” received nearly $420 million from TD Bank, among other transactions, despite the money’s unclear source.
In 2023, TD Bank closed its prior cryptocurrency division.
TD Bank previously made brief forays into the bitcoin market. In March 2022, the US independent investment bank TD Cowen established Cowen Digital to expose institutional clients to the cryptocurrency market through 16 cryptoassets, including Bitcoin (BTC) and Ether (ETH).
In June 2023, TD Cowen’s cryptocurrency division closed without explanation.
Three months before the closure of the wing, in August 2022, the Cowen Bank was purchased by TD Bank Group for $1.3 billion. The transaction was finalized in March 2023.
The closure coincided with the failure of other businesses in 2018 and the US financial and regulatory crises in 2023.