Bank of America shares dropped by up to 9% on Wednesday following the bank's admission of failures in money laundering controls. The institution agreed to pay $1.21 billion in penalties to three Treasury agencies. Regulators noted that the bank failed to report over $5 billion in suspicious transactions on time, with more than $1 billion linked to national security risks.
The penalty reduced the bank's quarterly profit by 17 cents per share. Additionally, adjusted earnings of $1.08 per share fell short of market estimates. The bank is now required to fund an independent review to identify previously missed suspicious transactions. Unlike criminal cases, these penalties were issued by civil regulators, which do not pursue individual criminal charges.
The situation drew comparisons to the case of Changpeng Zhao, who served four months in prison for anti-money laundering failures at Binance. Binance paid $4.3 billion in penalties after failing to file suspicious activity reports and violating sanctions by allowing $898 million in trades with users in Iran. Prosecutors had initially sought a three-year sentence for Zhao.
US enforcement policies have evolved since the Binance case. A May 2025 Justice Department memo expanded options for companies to avoid prosecution through self-reporting and cooperation. In April 2025, the department directed prosecutors to move away from regulation by prosecution for crypto platforms and disbanded its national crypto enforcement team. President Donald Trump later pardoned Zhao.
