As a seasoned financial analyst with over two decades of experience, I have witnessed my fair share of banking scandals and cryptocurrency drama. The recent TD Bank saga is a perfect storm of both, leaving me with a sense of déjà vu.
TD Bank’s recent collapse might be linked to two undisclosed digital currency companies based in Colombia and the UK.
On October 10th, the U.S. branch of TD Bank consented to a fine exceeding $3 billion and accepted restrictions on its U.S. expansion, resolving allegations concerning inadequate surveillance of money laundering activities by criminal organizations.
In my analysis, based on a report from the Financial Crimes Enforcement Network (FinCEN) dated October 10th, it appears that transactions worth over $1 billion connected to two unidentified cryptocurrency companies were facilitated through TD Bank. These transactions were allegedly handled by an undisclosed entity, referred to as “Customer Group C,” which is said to be active in the sales finance and real estate sectors.
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.”
As reported by FinCEN, this specific customer group consistently executed over $100 million in monthly wire transfers, primarily for what appears to be third-party cryptocurrency trading, in high-risk regions like Colombia, China, and Middle Eastern nations.
TD Bank facilitated over $650 million in transactions from an international crypto exchange
As an analyst, I can share that I’ve been instrumental in orchestrating transactions exceeding $650 million, which were bank transfers specifically for “Customer Group C.” These funds originated from a renowned international cryptocurrency exchange.
As per FinCEN’s findings, this volume of activity showed a noticeable departure or discrepancy when compared to the standard onboarding documents provided for this particular customer group. Furthermore, the report indicated:
“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.”
Regardless of the uncertain sources of the money, TD Bank persisted in handling transactions, which included supporting over $420 million for a financial entity providing cryptocurrency services in the potentially risky Colombian region.
TD Bank closed its previous crypto unit in 2023
Previously, TD Bank experimented with the cryptocurrency sector for a brief time. In March 2022, TD Cowen, an American autonomous financial institution, introduced Cowen Digital. This venture aims to offer institutional clients access to the crypto market through 16 different digital assets such as Bitcoin (BTC) and Ether (ETH).
TD Cowen’s cryptocurrency division was closed in June 2023, keeping the rationale for the shutdown a secret.
In August 2022, TD Bank Group purchased Cowen Bank for approximately $1.3 billion. The acquisition was finalized in March 2023, and just three months later, in June 2023, their cryptocurrency division was closed down.
The shutdown took place during a period when numerous cryptocurrency companies faced collapse the previous year, coinciding with the U.S. banking and regulatory predicament in the year 2023.
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2024-10-14 18:24