What Is the Financial Crimes Enforcement Network (FinCEN)?

The Financial Crimes Enforcement Network (FinCEN) is a bureau of the US Department of the Treasury that combats money laundering, terrorist financing, and other financial crimes. It does this by collecting and analyzing financial transaction data reported by banks, payment companies, and other regulated institutions, then sharing that intelligence with law enforcement.

FinCEN was established in 1990 and became a full bureau of the Treasury in 2001, when the USA PATRIOT Act expanded its authority. It serves as the US Financial Intelligence Unit (FIU) and is one of over 170 FIUs in the Egmont Group, an international network that shares financial intelligence across borders.

FinCEN does not conduct criminal prosecutions. Instead, it sets the rules that financial institutions must follow under the Bank Secrecy Act (BSA), monitors compliance, issues civil penalties for violations, and refers criminal cases to the Department of Justice.

What does FinCEN do?

FinCEN's work falls into three categories: regulation, intelligence, and enforcement.

On the regulatory side, FinCEN writes and administers the rules that implement the BSA. These rules require financial institutions to maintain anti-money laundering (AML) programs, verify customer identities through Know Your Customer (KYC) procedures, file reports on suspicious or large transactions, and keep records for at least five years.

As an intelligence agency, FinCEN collects and analyzes millions of financial reports each year, including Suspicious Activity Reports (SARs), Currency Transaction Reports (CTRs), and Reports of Foreign Bank and Financial Accounts (FBARs). It shares findings with federal, state, local, and international law enforcement. Under Section 314(a) of the PATRIOT Act, FinCEN can query over 27,000 financial institutions to locate accounts tied to suspected money laundering or terrorist financing.

On enforcement, FinCEN can assess civil money penalties against institutions that violate BSA requirements. Recent actions include a $3.5 million penalty against cryptocurrency platform Paxful in December 2025 for failing to register as a money services business (MSB), maintain an AML program, and file SARs (Source: FinCEN). In 2024, FinCEN assessed a $1.3 billion penalty against TD Bank for systematic AML failures, the largest BSA enforcement action in history.

Who does FinCEN regulate?

FinCEN's regulations apply to a broad range of "financial institutions" as defined under the BSA. These include:

• Banks and credit unions
• Money services businesses (MSBs), including money transmitters, currency exchangers, check cashers, and issuers of money orders or prepaid access
• Broker-dealers in securities
• Mutual funds
• Insurance companies
• Casinos and card clubs
• Dealers in precious metals, stones, or jewels
• Housing government-sponsored enterprises

The MSB category is especially relevant for fintech and payments companies. Under FinCEN's 2013 guidance on virtual currencies, any business that exchanges or transmits convertible virtual currency is classified as a money transmitter, making it an MSB subject to BSA requirements. This applies to cryptocurrency exchanges, wallet providers that facilitate transfers, and fiat on/off ramp operators.

What are FinCEN's reporting requirements?

Financial institutions must file several types of reports with FinCEN:

• Suspicious Activity Reports (SARs) are required when an institution knows, suspects, or has reason to suspect that a transaction involves funds from illegal activity, is designed to evade BSA requirements, or lacks a lawful purpose. For MSBs, the reporting threshold is $2,000 (USD) or more.
• Currency Transaction Reports (CTRs) must be filed for any cash transaction exceeding $10,000 in a single business day. Multiple transactions that appear structured to avoid this threshold (known as "structuring") are themselves reportable and illegal.‍
• Reports of Foreign Bank and Financial Accounts (FBARs) are required from any US person with a financial interest in or authority over foreign financial accounts exceeding $10,000 in aggregate value at any point during the year.

Institutions must also maintain records of funds transfers of $3,000 or more and comply with the Travel Rule, which requires transmitting specific sender and recipient information along with the payment. FinCEN updated its Travel Rule guidance in 2024 to explicitly cover cryptocurrency transactions.

What is a money services business under FinCEN rules?

A money services business (MSB) is any person or entity engaged in one or more of the following activities: money transmission, currency exchange, check cashing, issuing or selling money orders or traveler's checks, or providing or selling prepaid access. A $1,000-per-person-per-day threshold applies to most categories, but no threshold applies to money transmission, meaning any amount of money transfer activity triggers MSB status.

Every MSB must register with FinCEN by filing Form 107 within 180 days of beginning operations, and must renew registration every two years. MSBs must also develop a written AML compliance program that includes internal controls, a designated compliance officer, employee training, and independent review. Failure to register can result in civil penalties of $5,000 per day of violation, and criminal prosecution is possible for willful noncompliance.

MSB registration with FinCEN is a federal requirement, but most MSBs also need state-level money transmitter licenses in each state where they operate, obtained through the Nationwide Multistate Licensing System (NMLS).

How does FinCEN apply to cross-border payments?

Cross-border payment providers face heightened FinCEN scrutiny because international transfers carry higher money laundering and terrorist financing risk. FinCEN's rules require institutions processing cross-border payments to:

• Screen transactions against sanctions lists maintained by the Office of Foreign Assets Control (OFAC)
• Apply enhanced due diligence for transactions involving high-risk jurisdictions
• File SARs on suspicious cross-border activity
• Comply with the Travel Rule for all funds transfers of $3,000 or more, including those involving virtual currencies
• Maintain records of international transactions for at least five years

For fintechs building cross-border payment products in the US, BSA compliance is a prerequisite, not an add-on. Due's payment infrastructure includes built-in KYC/KYB verification, real-time transaction monitoring, and automated compliance workflows, so fintech companies can access local payment rails in 80+ countries without building AML infrastructure from scratch.

How is FinCEN different from OFAC?

Both FinCEN and the Office of Foreign Assets Control (OFAC) sit within the US Treasury, but they address different aspects of financial crime.

FinCEN focuses on detecting and preventing money laundering and terrorist financing through reporting requirements and financial intelligence. OFAC administers and enforces economic sanctions against designated foreign countries, individuals, and entities, primarily through the Specially Designated Nationals (SDN) list.

In practice, financial institutions must comply with both. A cross-border payment, for example, must pass through FinCEN's AML/KYC framework and OFAC's sanctions screening before it can be processed.