Financial Crime World

FinCEN Crackdown: Three Major Enforcement Actions Send Warning to Financial Institutions

In recent months, the Financial Crimes Enforcement Network (FinCEN) has taken three significant enforcement actions against financial institutions and individuals, sending a strong warning to others in the industry: compliance is key to avoiding severe penalties.

Recent Enforcement Actions

These actions demonstrate FinCEN’s commitment to enforcing anti-money laundering regulations. Here are the details:

  • Kingdom Trust Company: Slapped with a $1.5 million civil money penalty for willfully failing to file Suspicious Activity Reports (SARs). FinCEN’s investigation revealed that the company’s failures led to unreported suspicious activity related to a trade-based money laundering scheme and multiple securities fraud schemes.
  • Binance: Hit with a historic $3.4 billion enforcement action for violating the Bank Secrecy Act (BSA). FinCEN found that Binance had failed to register as a Money Services Business (MSB), develop an effective Anti-Money Laundering (AML) program, and report suspicious transactions. The company’s lack of AML controls allowed illicit actors to transact freely, supporting activities such as child sexual abuse and terrorism.
  • Bancredito International Bank and Trust Corporation: Assessed a $15 million civil money penalty for willful violations of the BSA. FinCEN found that the bank had processed millions of dollars in suspicious transactions through the United States on behalf of high-risk customers, ignored violations cited by its primary regulator, and failed to implement an AML program.
  • Gyanendra Kumar Asre: Slapped with a penalty and a five-year ban on participating in the conduct of affairs of a BSA-regulated financial institution for failing to register his own MSB with FinCEN.

Takeaways

These enforcement actions demonstrate that FinCEN is serious about enforcing compliance with anti-money laundering regulations. Financial institutions should take heed:

  • Compliance is not optional, but rather a critical component of protecting the integrity of our financial system.
  • Failure to comply can result in severe penalties, including fines and even criminal charges.
  • It’s essential for financial institutions to implement robust Anti-Money Laundering (AML) programs and report suspicious transactions.

By prioritizing compliance and working closely with FinCEN, financial institutions can help prevent money laundering and terrorist financing, ultimately protecting the integrity of our financial system.