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TD Bank’s $3 Billion Hit: Have We Reached Peak AML?

December 13, 2024 | 1 minutes reading time | By Jeffrey Kutler

Does the Canadian-owned bank’s severe punishment signify that anti-money laundering enforcement is working well and fit for purpose? Or is the system overdue for a course correction? Might cost-benefit discussions and shifting political winds bring a reset?

Modern anti-financial crime enforcement and the enlistment of financial institutions in that pursuit began with the Bank Secrecy Act (BSA) of 1970. The foundational U.S. anti-money laundering law has since been amended many times, replicated in jurisdictions globally, and perennially placed high among regulatory agencies’ supervisory priorities.

AML and CFT (countering the financing of terrorism) rules require massive filings by banks – and by a widening circle of financial and non-financial entities – of reports on potentially suspicious transactions. The data collector, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), fields continual complaints about the costs of that vigilance.

Some results rise above the din. Bitcoin Mercantile Exchange (BitMEX) pleaded guilty this year to BSA/AML violations. Conspiracy to commit money laundering was one of the criminal charges against Sam Bankman-Fried, the now imprisoned founder of cryptocurrency exchange FTX. Executives of the defunct, FTX-connected Silvergate Bank settled civil charges for AML deficiencies and disclosures.

The dubious distinction of worst banking...

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Topics: Regulation & Compliance, AML & Fraud

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