Financial Crime World

FINCEN Takes Aggressive Action Against Financial Institutions in Puerto Rico

The Financial Crimes Enforcement Network (FinCEN) has taken swift and decisive action against financial institutions in Puerto Rico for violating anti-money laundering (AML) regulations and failing to report suspicious transactions. This article highlights the most significant enforcement actions taken by FinCEN, including a record-breaking civil money penalty against Binance.

Landmark Enforcement Actions

  • A $3.4 billion civil money penalty was levied against Binance, the world’s largest virtual asset service provider, for willful violations of the Bank Secrecy Act (BSA). This is the largest enforcement action in Treasury’s history and marks a major milestone in the fight against cryptocurrency-based money laundering.
  • A $1.5 million civil money penalty was imposed on Kingdom Trust Company for failing to file suspicious activity reports (SARs) related to a trade-based money laundering scheme.
  • A $15 million civil money penalty was levied against Bancredito International Bank and Trust Corporation for willful violations of the BSA and its implementing regulations.

Individual Held Accountable

  • Gyanendra Kumar Azre, who served as the BSA Officer of a New York credit union and had his own unregistered money services business (MSB), was assessed a penalty and barred from participating in the conduct of the affairs of a BSA-regulated financial institution for five years.

Commitment to Protecting the U.S. Financial System

FinCEN’s enforcement actions demonstrate its commitment to protecting the U.S. financial system from harm and holding accountable those who fail to comply with AML regulations. These actions also highlight the importance of effective AML controls and reporting, particularly in high-risk sectors such as cryptocurrency and international banking.

Partnership and Education

FinCEN Director emphasized the agency’s efforts to partner with authorities and private industry in Puerto Rico to promote transparency and prevent financial crimes. The agency will continue to take enforcement action against those who fail to comply with AML regulations, while also working to educate and engage with financial institutions to ensure they have the tools and resources they need to effectively implement AML programs.

Conclusion

The actions taken by FinCEN are a stark reminder that the era of “easy” money laundering through Puerto Rican IBEs is over. As FinCEN continues to work towards its goal of protecting the U.S. financial system, it is clear that those who fail to comply with AML regulations will face serious consequences.