Anti-Money Laundering

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On December 9, FinCEN announced a consent order imposing a $3.5 million civil money penalty on a peer-to-peer virtual asset trading platform, alleging willful violations of the Bank Secrecy Act. FinCEN alleged that the platform’s compliance failures allowed it to process substantial volumes of transactions connected to criminal activity, sanctions exposure, and other high-risk conduct over an extended period.Continue Reading FinCEN Assesses $3.5 Million Penalty Against Virtual Asset Platform for Alleged BSA Violations

On September 22, the Financial Crimes Enforcement Network proposed to delay the effective date of its Investment Adviser/CFT Program and SAR requirements for registered investment advisers and exempt reporting advisers from January 1, 2026 to January 1, 2028. The notice of proposed rulemaking frames the delay as providing time to review tailoring across diverse adviser business models while maintaining the rule’s policy objectives.Continue Reading FinCEN Proposes Two-Year Delay of Investment Adviser AML Rule

On July 9, the New York Department of Financial Services (NYDFS), joined by regulators from five other states, entered into a multistate settlement with a money transmitter headquartered in New York. The $4.2 million consent order resolves allegations arising from a multistate examination conducted by the Conference of State Bank Supervisors (CSBS) and the Money Transmitter Regulators Association (MTRA) citing alleged violations of the Bank Secrecy Act (BSA), FinCEN regulations, and the CFPB’s Remittance Transfer Rule.Continue Reading NYDFS and Other State Regulators Impose $4.2 Million Penalty on Money Transmitter

On April 7, the FDIC and the Maryland Office of Financial Regulation terminated two consent orders against a regional bank headquartered in Maryland. The termination concludes joint federal and state enforcement actions that required the bank to remediate deficiencies in its anti-money laundering (AML) program, interest rate risk management, and consumer protection practices.Continue Reading FDIC and Maryland End Joint Consent Orders Against Regional Bank

On April 22, the Fourth Circuit declined to reconsider a panel ruling that found a credit union could not be held liable for a scam in which fraudsters diverted over $560,000 from a metal fabricator through unauthorized ACH transfers. The denial leaves intact a March 2025 decision overturning the district court’s earlier ruling in favor of the plaintiff.Continue Reading Fourth Circuit Rejects Rehearing in ACH Fraud Suit Alleging Violations of KYC Rules and NACHA Operating Standards

On January 12, South Dakota’s Division of Banking issued a mandate setting March 31, 2024 as the deadline for all South Dakota licensed money lenders and non-residential mortgage brokers to comply with their Bank Secrecy Act/Anti-Money Laundering (BSA/AML) requirements under a 2020 Final Rule published by the Financial Crimes Enforcement Network (FinCEN). FinCEN’s 2020 Final Rule notably closed a regulatory loophole, extending BSA/AML requirements to banks that lack a federal functional regulator. A “federal functional regulator” is any one of the following: Federal Reserve Board, FDIC, NCUA, OCC, OTS, SEC, or CFTC. There are over 550 banks that currently lack a federal functional regulator, consisting of state-chartered, non-depository trust companies, non-federally insured credit unions, and some international banking entities.Continue Reading South Dakota Lenders on Tight Deadline for BSA/AML Compliance

On January 19, the Federal Reserve Board (FRB) and New York Department of Financial Services (NYDFS) each issued orders settling an action against a large global bank for alleged BSA/AML violations and other compliance failures. The FRB issued a cease and desist order with a $2.4 million civil money penalty, while the NYDFS issued a consent order with a $30 million civil money penalty.Continue Reading Federal Reserve and NYDFS Penalize Large Global Bank for BSA/AML and Other Compliance Failures

In April, we continued to see a steady pace in the seriousness and frequency of crypto enforcement actions by state and federal law enforcement.  (See our March 2022 Crypto Enforcement Actions Roundup blog here where we discuss the regulatory guidance and jurisdiction of federal and state agencies to enforce these matters.)
Continue Reading April 2022 Crypto Enforcement Actions And Regulatory Guidance Roundup

On March 17, the OCC and FinCEN issued civil monetary penalties against a federal savings bank for “willfully” failing to meet minimum compliance program requirements and shoddy suspicious transaction reporting. The consent orders read like a veritable “how not to” for reviewing anti-money laundering alerts.
Continue Reading OCC and FinCEN Issue $200 Million in Penalties for BSA-AML Violations

On February 4, the Department of the Treasury published a study on the facilitation of money laundering and terrorist financing through the art trade.  Among other considerations, the report discussed the risks of financial crimes in connection with NFTs.  (See a previous post on NFTs from our sister blog here and a recent podcast here).  The study found that the high-value art market has certain inherent qualities that make it potentially vulnerable to a range of financial crimes – as we noted above.  NFT purchasers, marketplaces, issuers, and other intermediaries in NFT transactions should be aware of the Treasury Departments’ interest in regulation and the potential for abuse through NFT transactions. This Treasury Department report is the latest in a series of studies and reports by federal regulatory agencies that aim to warn investors about the potential for abuse.
Continue Reading Treasury’s Study Discusses Financial Crimes and NFTs

On December 16, 2021, the Office of the Comptroller of the Currency (“OCC”) and the Financial Crimes Enforcement Network (“FinCEN”) issued civil monetary penalties against a Texas community bank for violations of the Bank Secrecy Act (“BSA”).  The consent orders read like a veritable “how not to” for reviewing anti-money laundering alerts.
Continue Reading OCC and FinCEN Issue $9 Million in Penalties for BSA-AML Violations