TD Bank’s recent financial troubles may be linked to two unnamed cryptocurrency firms based in Colombia and the United Kingdom.
On October 10, TD Bank’s U.S. branch agreed to pay over $3 billion in penalties and accepted limitations on its U.S. growth, settling charges related to improper monitoring of money laundering activities tied to criminal organizations.
According to a report by the Financial Crimes Enforcement Network (FinCEN), more than $1 billion of TD Bank’s transfer volume involved two unidentified cryptocurrency firms. The transactions were conducted by a company referred to as “Customer Group C,” which claimed to operate in the “sales finance and real estate industries.”
The FinCEN report states:
“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.”
FinCEN further highlighted that Customer Group C processed over $100 million in monthly wire transfers, facilitating third-party cryptocurrency trading in high-risk jurisdictions, including Colombia, China, and parts of the Middle East.
TD Bank facilitated more than $650 million in transactions for Customer Group C, much of which came from an international cryptocurrency exchange. The report noted that this transaction volume “significantly deviated” from the group’s original onboarding documentation.
Despite the uncertain origins of the funds, TD Bank processed over $420 million in transactions to a Colombian financial institution offering cryptocurrency services.
TD Bank previously ventured into cryptocurrency through TD Cowen’s digital unit, Cowen Digital, launched in March 2022. This unit provided institutional clients access to 16 crypto assets, including Bitcoin and Ether. However, TD Cowen’s crypto unit was shut down in June 2023, following several collapses in the crypto industry and the banking regulatory crisis of 2023.
The bank had acquired Cowen for $1.3 billion in a deal completed in March 2023, three months before closing the crypto division.
