Shopify & The Fentanyl Bank Rot

TD Bank, a major Canadian financial institution potentially among Shopify’s banking partners, faces a massive scandal. In early 2024, public reports revealed that TD Bank is under U.S. federal investigation, including by the Department of Justice, for its alleged role in laundering hundreds of millions of dollars in illicit fentanyl profits and other drug money through its U.S. branches. Chinese crime groups and drug traffickers reportedly used TD to launder money from U.S. fentanyl sales. As a consequence, TD Bank pleaded guilty to conspiracy to commit money laundering and agreed to pay approximately $3 billion in a settlement. This situation stemmed from “chronic failures” in its anti-money laundering (AML) program, which allowed criminal enterprises to flourish. The Financial Crimes Enforcement Network (FinCEN) assessed a record $1.3 billion penalty against TD Bank for these Bank Secrecy Act violations.

Wider Scandals: Other Major Banks Face Scrutiny

TD Bank is not an isolated case. Other large banks, the kind Shopify might utilize for its extensive global operations, have also faced significant investigations and fines:

• JPMorgan Chase has confronted numerous actions. These include a $920 million fine in 2020 for illegal “spoofing” trades and issues with monitoring trading activity. The institution also received a $1.7 billion fine related to the Bernie Madoff Ponzi scheme due to poor oversight. More recently, the Consumer Financial Protection Bureau (CFPB) sued JPMorgan Chase (along with Bank of America and Wells Fargo) over alleged failures to protect users of the Zelle payment network from fraud, resulting in massive consumer losses.
• Bank of America was also implicated in the Zelle investigation and lawsuit by the CFPB regarding alleged failures to reimburse customers defrauded via Zelle. The bank faced an $800 million potential loss connected to this and other regulatory examinations into its handling of electronic payments and AML compliance.
• Citigroup became involved in the LIBOR price-fixing scandal and pleaded guilty to felony charges.

These instances reveal a pattern of serious issues within major financial institutions, ranging from critical AML failures to fraud and market manipulation, raising questions about the operational integrity of key players in the financial system. These issues form a critical backdrop to understanding the environment in which large tech companies operate and select their banking partners.

First Citizens BancShares & The Holding Family: Acquiring SVB Amidst Political Alignments

The institution that acquired the remnants of Silicon Valley Bank (SVB) in March 2023 is First Citizens BancShares. While a publicly traded company, the Holding family of North Carolina has maintained control for generations, with Frank Holding Jr. currently serving as Chairman and CEO. This family and individuals associated with the bank are notable political donors.

• Political Contributions – A Clear Pattern: Public campaign finance records from sources like OpenSecrets demonstrate a consistent and strong pattern of donations from Frank Holding Jr. and other Holding family members to Republican candidates, the Republican Party (e.g., Republican Party of North Carolina, National Republican Congressional Cmte), and conservative PACs (e.g., American Foundations Cmte). Frank B. Holding Jr., for example, has made substantial contributions to “American Foundations Cmte” and various Republican party committees and candidates. His cousin, George Holding, served as a Republican congressman.
• Alignment with Political Agendas: Trump-aligned Support: While direct individual donations to Donald Trump Jr. are not specifically highlighted in immediate search results, the extensive funding of Republican Party committees and conservative PACs by the Holding family and associated individuals demonstrates broad support for the Republican agenda. This support would align with and indirectly bolster figures like Donald Trump and his family involved in politics. The backing for Republican congressional candidates like George Holding also indicates this alignment. Democratic Contributions (Comparatively Minimal): Search results for Frank Holding Jr. and First Citizens-related political giving are heavily skewed towards Republican and conservative entities. While some scattered, smaller contributions to individual Democrats might exist from the wider pool of employees in a large corporation, the controlling family’s documented pattern does not reveal significant direct financial backing for Joe Biden, Kamala Harris, or major Democratic fundraising platforms like ActBlue that compares to their Republican support. Available records emphasize contributions to Republican entities and candidates such as George Holding, Philip Edward Berger Sr. (R), and Timothy Keith Moore (R) in North Carolina. CPAC: While direct sponsorship details are not present, the ideological alignment demonstrated through consistent funding of conservative causes and Republican entities would be in harmony with the general political leanings of CPAC.

The Holding family and First Citizens leadership clearly lean conservative and Republican in their political giving, primarily focusing on candidates and organizations that support a pro-business, fiscally conservative agenda.

Shopify’s Leadership, Platform & The “Millions” Question

Against this backdrop of banking controversies and political financial maneuvering, Shopify operates as a major e-commerce platform. It is led by CEO Tobias “Tobi” Lütke, who co-founded the company and built its original platform on Ruby on Rails. Shopify claims to serve “millions” of businesses worldwide. Regarding this “millions” claim, skepticism is warranted. While no specific, formal investigations refute Shopify’s exact definition of an “active, thriving business” versus any account ever created, this remains a known gray area with large platform user statistics. Headline numbers like these can often inflate the reality of truly active, paying customers.

When SVB collapsed, Lütke stated it was just “one of about a dozen banks Shopify used.” The identities of the others remain undisclosed by Shopify. However, for a company of its size, key banking partners would likely include major Canadian banks (RBC, TD, BMO, etc.) for its home operations, and major U.S./global banks (JPMorgan Chase, Citigroup, Bank of America, etc.) for its vast international reach, alongside other specialized institutions.

The Lucira Health Story: A Side Note on SVB’s World

A separate story involving Silicon Valley Bank (which First Citizens now owns) offers a glimpse into that specific financial world:

• The Players: Lucira Health, led by CEO Erik Engelson (a UC San Diego alum), developed an at-home COVID/Flu test and was reportedly financed by SVB.
• The Crunch: The company filed for bankruptcy, citing FDA approval delays.
• The Twist: The FDA then reportedly approved its test the day after the bankruptcy filing.
• The Sale: Pfizer bought Lucira’s assets, supposedly for a very low price, via a Delaware court.

This situation highlights the high-pressure environment of biotech and the kind of financial plays that occur around banks like SVB.

P.S. The Blackberry Thing: Lütke is German-Canadian. Blackberry (formerly RIM) was a Canadian tech giant. This is an observation on two significant tech players with Canadian HQs, one with a German founder. No conspiracy is suggested, merely a parallel.