Under existing Bank Secrecy Act regulations, FinCEN has defined money services businesses to include five distinct types of financial services providers and the U.S. Postal Service: (1) currency dealers or exchangers; (2) check cashers; (3) issuers of traveler’s checks, money orders, or stored value; (4) sellers or redeemers of traveler’s checks, money orders, or stored value; and (5) money transmitters. There is a threshold requirement for businesses in the first four categories – a business that engages in such transactions will not be considered a money services business if it does not engage in such transactions in an amount greater that $1,000 for any person on any day in one or more transactions. See 31 CFR 103.11(uu)

KYC controls typically include the following:

Collection and analysis of basic identity information such as Identity documents (referred to in US regulations and practice as a “Customer Identification Program” or CIP)
Name matching against lists of known parties (such as “politically exposed person” or PEP)
Determination of the customer’s risk in terms of propensity to commit money laundering, terrorist finance, or identity theft
Creation of an expectation of a customer’s transactional behavior
Monitoring of a customer’s transactions against expected behavior and recorded profile as well as that of the customer’s peers


New York – Thanks to Benjamin Lawsky


o State and federal regulators are evaluating and developing approaches to regulating virtual
currencies and companies that deal in virtual currencies. Any company that offers to
exchange, administer, or maintain virtual currencies may be subject to state regulation and
licensing, as well as federal regulation. CURRENTLY, MARYLAND DOES NOT