Adjunct Professor Austin Campbell of Columbia Business School has expressed concerns over perceived disparities in the treatment of executives from traditional banks and those in the cryptocurrency industry. In an October 10 post, Campbell said that if an executive from TD Bank does not face jail time for money laundering, it highlights a double standard between these sectors.
"If executives from TD bank are not being jailed for money laundering of this scale, a court should reject this plea agreement and demand a trial," said Campbell. "No double standards. Money laundering is not okay just because a bank did it."
On October 10, the U.S. Department of Justice (DOJ) announced that TD Bank, ranked as the 10th-largest bank in the United States, pleaded guilty to violations of the Bank Secrecy Act (BSA) and money laundering. According to a press release, TD Bank agreed to pay $1.8 billion in penalties. The DOJ indicated that TD Bank's failure to maintain anti-money laundering (AML) controls rendered its services "convenient for criminals." U.S. Attorney Philip Sellinger said, "As a result of staggering and pervasive failures in oversight, it willfully failed to monitor trillions of dollars of transactions [...] which allowed hundreds of millions of dollars from money laundering networks to flow through the bank, including for international drug traffickers. The bank was aware of these risks."
According to Fortune, TD Bank's total penalties amount to $3 billion. Despite this substantial financial penalty, none of the bank executives responsible for these activities are facing imprisonment. Fortune remarked on a long-standing trend where banking executives evade criminal charges.
Adjunct Columbia Business Professor Omid Malekan has also commented on this issue. In November, he noted that more money laundering occurs within the traditional financial system compared to the crypto industry but added that crypto is often viewed as "some unique enabler of bad people doing bad things," as reported by Federal Newswire. Malekan said, "Many of the world’s worst tyrants use America as their piggy bank," but such actions are overlooked because "somebody did the paperwork." He suggested researching 'banks facilitating money laundering' would reveal numerous instances where well-known financial firms have engaged in worse activities with larger sums yet faced milder repercussions.
This discussion follows former Binance CEO Changpeng Zhao's guilty plea to BSA violations and subsequent four-month prison sentence for failing to implement adequate AML controls at Binance, according to Legal Newsline. Calvin Cheng, a former member of Singapore's parliament, pointed out that CEOs from major traditional banks have been fined for similar compliance failures but have not faced criminal charges or prison sentences.
Campbell is currently a partner at Lunaria Group and founded Zero Knowledge Consulting in February 2023. His previous positions include chief risk officer at Paxos and head of stable value products at Global Rates Trading.
