The Commonwealth Bank of Australia (CBA), which recently categorically banned customers from buying cryptocurrency with credit cards, has agreed to pay a further A$700 million in legal fees for violating anti-money laundering and counter-terrorism laws that have helped some of the bank's drug-dealing clients make millions in profits.
Federal financial agency AUSTRAC last year accused the bank of suppressing information about suspicious activity. The fine is believed to be the largest in the country's corporate history.
The CBA admitted to late filing of 5,306 reports of transactions over $10,000 conducted through its smart ATMs. The law requires banks to report such transactions within 10 business days. According to the bank's explanations, the reason for this was a “code error.”
The bank also did not bother to check 778,370 accounts for money laundering over three years. Bank employees admitted that they reported 149 cases of suspicious activity late or not at all. The bank also admitted it failed to disclose to regulators millions of dollars in money laundering incidents.
A federal court must still accept the terms of the bank's and agency's settlements. Meanwhile, AUSTRAC is pointing to the case as a warning to other banks.
In a statement, Nicole Rose, AUSTRAC's chief executive, said the agency was pleased with the way the bank handled the negotiations.
Matt Comyn, the bank's chief executive, agreed that the irregularities were serious and said the bank had already spent more than $400 million trying to fix the problem. He said the bank's mistakes were "completely unintentional."
The bank must pay the fine within a year and has already paid half of the A$700 million fine. The bank will also pay AUSTRAC $2.5 million in legal fees.
CBA was also one of the global banks accused of freezing the accounts of cryptocurrency traders last year. Bank representatives said that at that time they could not support cryptocurrencies because they were not regulated by anyone and carried the threat of “supporting terrorism.”
According to ccn
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