Regulatory Compliance for Money Transmitters

InnReg has supported the launch and growth of disruptive fintech companies operating under the MSB/Money Transmitter regulatory framework since 2013 and developed expertise in understanding client business requirements while mitigating risks and managing the impact of regulatory requirements.

Specifically, InnReg has developed a stellar track record in guiding and assisting money transmitters through the complexities of licensing. Such challenges include obtaining state and federal licenses and meeting appropriate compliance, operational, and staffing requirements per jurisdiction specifications.


Compliance Services for Money Transmitter Fintech Innovators

Our diversified portfolio of compliance services can help money-transmitter firms develop their business models in compliance with the US market’s regulatory requirements.

InnReg’s core services for businesses involved in money transmission include:

Licensing Requirements and Guidance with Financial Regulators

  • Regulatory Review: Initial review of the US regulatory structure and agency requirements tailored for money transmitters (e.g., SEC, FINRA, CFTC, NFA, CFPB).
  • Federal and state regulator compliance facilitation: Licensing, filings, exams and audits, consumer complaints, and regulator responses
  • Due Diligence Management: Assistance in managing due diligence meetings and records requests.
  • Compliance Program Establishment: Establishment, launch, and maintenance of compliance programs for money transmitters in the US market.

 

Compliance Consulting Services

  • Compliance policies development and management: Federal (BSA/AML, UDAAP, etc.) and state regulations
  • Monitoring for regulatory changes
  • Marketing, advertising, and content compliance: Guidance on marketing and advertising initiatives that align with US regulations (UDAAP, advertising, social media, endorsements)
  • Employee onboarding: Background checks and training
  • Risk assessment and quality control
  • Electronic books and records management
  • Information security and data protection procedures
  • Technology and vendor review
  • Suspicious activity detection, monitoring, and reporting

Outsourcing Services

  • Executive Level: Provision of a Chief Compliance Officer (CCO) to guide your US market compliance strategy.
  • Management Level: Support compliance staff to assist in aligning with US regulatory standards.
  • Fully Managed: Our team offers full compliance support to manage the regulatory aspects of financial markets in the US.

 

Registration and Product Design Support

  • Compliance and Operations Alignment: Support in aligning features and functionalities with compliance and operations requirements in the United States.
  • Cost/Benefit Analysis: Analysis of the implications of becoming a regulated entity.

 

Operational Consulting and Workflow Design Services

  • User Experience Recommendations: Recommendations for user experience optimization, such as onboarding, transaction processing, fund transfers, and more.
  • Third Party Due Diligence: Assistance in third-party onboarding and due diligence (e.g., affiliates, referral agents, lead generators)
  • AML and Fraud Prevention: Support with AML, fraud prevention, and suspicious activity monitoring in adherence to US market standards.

Case Studies for Money Transmitters

With a team of over 30 compliance and consulting experts, we have had the opportunity to work with several money transmitters.

Our regulatory guidance facilitated the clients’ goals while navigating the complex US financial markets. Engaging in this business model required separate money transmitter licenses across multiple jurisdictions and meeting appropriate compliance, operational, and staffing requirements per each jurisdiction’s specifications.

Below, we share a case study for a fast-growing global blockchain and NFT gaming marketplace client that navigated money transmitter-related federal and state regulatory registrations and licensing regulations with InnReg’s services.

 

Global Crypto Fintech Unicorn

A global crypto fintech unicorn sought InnReg’s expertise for guidance on the federal and state regulatory registration and licensing requirements to become a money transmitter in the US.

InnReg supported a non-US blockchain innovator through complex operational and regulatory planning to apply for and obtain state and federal money transmitter licenses. FinCEN registration and state licensing requirements differ widely in the number of rules, their type, and complexity. In addition, licensure-related costs and processing times can vary significantly from state to state, and each license's acquisition may take several months to two years.

The client required support to understand and address the many obstacles of this complex process. They needed a multi-pronged, multi-jurisdictional approach requiring diligent program management, governance support, and in-depth experience with the nuances of money transmitter regulations as they apply to blockchain platforms — a need that InnReg was well-positioned to address.

Read the complete case study.


Client Testimonials

Early-Stage, Cross-Border Neobank

“Having a Compliance Officer backed by a team with the right knowledge and a compliance practice with the appropriate artifacts and methodology is a huge help. InnReg has enabled us to operate with confidence and focus on execution. We initially hired InnReg to provide temporary support, but they have become an intrinsic part of our business.”
- Client Founder and CEO

 

Crypto Lender

"Francesco and his team helped us build and scale a global crypto company, navigate the many complex legal and regulatory challenges, and design a product that helped us satisfy our many constituents – customers, partners, local, national and international regulators. The team also provided critical guidance in the areas of risk management, security, HR, and strategic roadmap considerations. They have become a full extension of our team, and we would not be in the same place today without their endless guidance, support, and great judgment.”
- Client CEO

 

Fractional Broker-Dealer

“Francesco has been the driving force in establishing our compliance, legal, and risk management functions. His experience and profound knowledge of the industry have been instrumental in protecting our brand during high-growth periods, as well as through challenging times. A clear communicator, Francesco has established strong relationships with industry regulators. In addition to his experience and knowledge of business, law, and regulations, Francesco has an extremely organized approach to problem-solving. I have been very happy to work with Francesco and look forward to doing so again in the future.”
- Client President and COO


Why InnReg?

Are you looking for a global expert in fintech compliance?

Since 2013, InnReg has been providing compliance consulting and outsourcing services to fintechs worldwide, including money transmitters. InnReg offers global fintech compliance and operations consulting and outsourcing services focused on mitigating regulatory risk while partnering with clients to launch innovative fintech products and services. Our competitive advantage and unique experience enable us to manage complex projects on behalf of clients operating in gray and rapidly evolving areas for both regulators and businesses.

InnReg’s approach goes beyond compliance and helps clients build innovative products and services while ensuring regulatory risks are mitigated. Part of navigating these regulatory landscapes involves understanding the evolving partnerships between banks and fintechs, which have become a pillar of financial innovation.


Do you have a compliance question about your money transmitter fintech? We can help money transmitters’ compliance and growth journey. We have also developed a detailed guide for crypto fintech founders and leaders.

 

Cryptocurrency Laws and State Money Transmitter Regulation for Fintech Leaders


The differences in regulatory requirements between federal and state laws, as well as the many state-by-state nuances, require a very robust compliance program that considers how the entity is structured, the types of products or services it offers, and the particular jurisdictions it operates in. InnReg can help formulate your optimal structure and articulate your unique business profile to regulators. You can read more of our insights on money transmitter regulations and licensing requirements.

If you’re interested in learning more about how InnReg can support your money transmitter fintech in navigating the US regulatory landscape, reach out to us by clicking the button below:

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InnReg Compliance Blog: Additional Compliance Insights for Money Transmitters

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