News & Analysis as of

Money Services Business

FinCEN Action Demonstrates the Agency’s Ability to Use Anti-Money Laundering Laws Against Non-U.S. Entities

On Wednesday, July 27, 2017, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) announced a $110 million fine levied against BTC-e, a digital currency exchange, for BTC-e’s alleged refusal to abide by...more

Bridging the Week - July 2017 #3

LedgerX Approved by CFTC as First Derivatives Clearing Organization for Fully Collateralized Swap Contracts Potentially Settling in Bitcoin: On July 24, LedgerX was approved by the Commodity Futures Trading Commission as a...more

FinCEN Takes First Action Against Foreign-Located MSB—“The Virtual Currency Exchange of Choice for Criminals”—For Willfully...

by Ballard Spahr LLP on

On July 26, FinCEN, in coordination with the U.S. Attorney’s Office for the Northern District of California (“NDCA USAO”), assessed a $110,003,314 civil money penalty against BTC-e a/k/a Canton Business Corporation (“BTC-e”)...more

Initial Coin Offerings: An Overview of Regulatory Considerations

In recent months, a variety of companies have considered "initial coin offerings" (ICOs) as a way to generate money for their businesses. Companies considering ICOs should be aware that, depending on the structure of the...more

State Regulators Seek to Reduce Regulatory Burden for Money Services Businesses

by Stinson Leonard Street on

A new Money Services Business (MSB) Call Report was released on April 18, 2017 and is the next step for state regulators towards standardization of MSB regulation, including regulation of certain FinTech companies. The...more

Governor Signs Into Law Amendments to Washington’s Uniform Money Services Act

by Perkins Coie on

On April 18 the governor of Washington signed into law amendments proposed by the Washington Department of Financial Institutions (“DFI”) in December of last year, to the state’s Uniform Money Services Act, including...more

Florida Lawmakers Seek to Bring Virtual Currency into the Fold

by Ballard Spahr LLP on

On Monday, the state of Florida moved a step closer towards amending its money laundering statute to include the nefarious use of bitcoin and other virtual currencies. The bill, H.B. 1379, has sailed through a committee vote...more

Failure to Register with FINCEN Sustains Guilty Pleas by Virtual Currency Exchangers

by Ballard Spahr LLP on

It is a potential crime to conduct a business that exchanges virtual currency and fail to register with the Financial Crimes Enforcement Network (“FinCEN“), even if the State in which one operates does not impose a similar...more

Announcement of new reporting tool for money service businesses by state regulators highlights fintech companies

by Ballard Spahr LLP on

The Conference of State Bank Supervisors issued a press release this week in which it announced the April 1 release of a new tool within the Nationwide Multistate Licensing System (NMLS) to streamline reporting by money...more

Western Union to Pay $586 Million in Restitution and Civil Penalties for AML Compliance Failure - Alabama Bankers Association...

On Jan. 19, Western Union Financial Services, Inc. agreed to pay civil penalties and restitution to victims of fraud totaling $586 million to resolve actions brought by the U.S. Treasury Department’s Financial Crimes...more

State Money Service Business Laws—Tips to Avoid Unnecessary Expense and Unexpected Liability

The payments ecosystem has become increasingly diverse in recent years, including not only processors and ISOs, but various types of payment facilitators, bill pay services, virtual wallets and digital currencies. New...more

FinCEN Enforcement Action Highlights AML Compliance Program Failures and Conflicts of Interest for High-Risk MSB Customers

On February 27, 2017, FinCEN announced a $7 million civil monetary penalty against Merchants for willful violations of the BSA. Additionally, the Office of the Comptroller of the Currency (OCC), Merchants’ federal functional...more

Western Union to Pay $586 Million in Restitution and Civil Penalties for AML Compliance Failure

On January 19, 2017, Western Union Financial Services, Inc. agreed to pay civil penalties and restitution to victims of fraud totaling $586 million to resolve actions brought by the U.S. Treasury Department’s Financial Crimes...more

Is Your Data Ready to Move to a Uniform Report Submission? NMLS MSB Call Report Adopted for 22 Licenses as of January 1st

Seventeen state agencies, affecting 22 license types, have currently committed to adopt the NMLS MSB Call report for Q1 2017 reporting. The NMLS MSB Call Report applies to licensees who conduct the following activities: money...more

Fraud is Flourishing: Canada’s Regulatory Patchwork Paves Way for Financial Crimes

by Bennett Jones LLP on

Fraud is alive and well in Canada. It is thriving and fraudsters are innovating. This boom in white-collar crime is partly the result of Canada’s lack of a uniform regulatory system and ineffective law enforcement....more

Virtual Currency May Not Be Money but Dismissal Is Real

Is bitcoin money? Not according to a Florida judge who threw out criminal charges against a defendant accused of money laundering and acting as an unlicensed money services business in violation of state law. What...more

South Carolina Enacts its First Law Regulating Money Transmission

by Bryan Cave on

Last month South Carolina joined 48 other states in regulating money transmission with unanimous passage of House Bill 4554. The bill, enacting the South Carolina Anti-Money Laundering Act, provides the framework for...more

EU brings virtual currency exchanges and wallet providers under the EU Anti-Money Laundering Directive

by Reed Smith on

On 5 July 2016, the European Commission (the Commission) adopted a proposal for a directive that, when passed, will begin to narrow the regulatory gap between the U.S. and the EU for virtual currency exchange platforms and...more

Decreasing the Risk of Derisking: Mitigating Financial Institution Perceived Risk of MSBs

State-regulated financial institutions are best positioned to appreciate the amount of regulatory oversight present for a money services business (MSB) and to use this knowledge to mitigate perceived risk. The same state...more

The Regulatory Pendulum: When is De-Risking by Financial Institutions Too Much?

by BakerHostetler on

In the environment of increasingly aggressive regulatory and criminal enforcement of anti-money laundering (AML) violations, concerns about de-risking – when financial institutions close accounts or restrict access to new...more

Repeat BSA Violations Cited for Two FinCEN Fines

Repeat violations of the Bank Secrecy Act (BSA) are cited by the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) for a $1 million penalty against a casino and a $10,000 fine against a money...more

The CFPB’s Examination Authority Over MSBs

by Bryan Cave on

New and existing money services businesses frequently ask when or if the CFPB will “examine” them. All consumer financial services businesses naturally worry about the CFPB’s reach and want to be prepared. This article...more

Federal Regulators Clarify Bank CIP Obligations for Prepaid Cardholders

by WilmerHale on

Banks and credit unions that issue reloadable, general purpose prepaid cards must apply Customer Identification Program (CIP) procedures to those cardholders, according to guidance issued by the federal banking regulators and...more

FinCEN Issues Guidance on MSB Obligations to Supervise Agents

by Locke Lord LLP on

On March 11, 2016, the Financial Crimes Enforcement Network (FinCEN) issued guidance to Money Services Businesses (MSBs) to reiterate “the existing anti-money laundering (AML) program requirements on the principals of MSBs to...more

The Banking Stepchild: Money Service Businesses

by Michael Volkov on

Sometimes risk analysis can result in paralysis. Finding your risk tolerance and applying it to specific situations requires a nuanced approach. I am always wary of anyone who tells me categorical rules – e.g. we do not...more

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Cybersecurity

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