Question 1

What companies are required to have an AML compliance program?

Accepted Answer

Under the Bank Secrecy Act, financial institutions including banks, broker-dealers, money services businesses (MSBs), mutual funds, and insurance companies must maintain AML programs. FinCEN’s definition of MSB captures many fintech companies, including those engaged in money transmission, currency exchange, or payment processing.

Question 2

What are the core elements of an AML compliance program?

Accepted Answer

A compliant AML program must include written internal policies and procedures, a designated compliance officer, ongoing employee training, independent testing by a qualified third party, risk-based customer due diligence (CDD) and enhanced due diligence (EDD) procedures, suspicious activity monitoring and SAR filing processes, OFAC sanctions screening, and recordkeeping. FinTech Law designs AML programs calibrated to the company’s specific risk profile and regulatory status.

Question 3

Does my fintech company need to register with FinCEN?

Accepted Answer

If your company meets the definition of a money services business under FinCEN’s regulations — which includes money transmitters, payment processors, currency exchangers, and dealers in convertible virtual currency — you must register with FinCEN within 180 days of commencing operations. Registration is a federal requirement separate from state money transmitter licensing. Failure to register carries criminal penalties.

Question 4

How do AML requirements apply to cryptocurrency and digital asset businesses?

Accepted Answer

FinCEN has confirmed that businesses engaged in accepting and transmitting convertible virtual currencies are money transmitters subject to BSA obligations. This includes cryptocurrency exchanges, certain DeFi platforms with centralized components, and any business facilitating the transfer of digital assets between parties. AML obligations include customer identification programs, transaction monitoring, SAR filing, CTR reporting for transactions above $10,000, and travel rule compliance for fund transfers.

Question 5

What happens if my company fails an AML examination or audit?

Accepted Answer

Consequences range from remediation requirements and consent orders to civil money penalties (which can reach millions of dollars per violation) and criminal prosecution in severe cases. Federal banking regulators, FinCEN, and state regulators all have enforcement authority. Proactive measures — including regular independent testing, timely SAR filing, and documented remediation of identified deficiencies — significantly reduce enforcement risk. FinTech Law assists with examination preparation, response, and remediation.

AML and Financial Crime Compliance

We provide AML compliance and advisory services for investment advisers, funds, and digital asset firms, including developing AML policies, due diligence, and regulatory reporting.

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