Which of the following is true about AML requirements and challenges in fintech?

• A. Online investing must adhere to the Bank Secrecy Act
• B. MSBs are exempt from FinCEN registration
• C. There are no SAR filing requirements for fintechs
• D. AML regulations only apply to traditional banks

Answer: (A)

AML controls extend to fintech platforms that provide investing because they are financial entities under the Bank Secrecy Act. If a platform acts as a broker-dealer or otherwise offers investment services, it must have a risk-based AML program, perform customer due diligence, monitor transactions for suspicious activity, retain records, and file suspicious activity reports when red flags arise. FinCEN registration is required for MSBs, but many fintech investing platforms operate as broker-dealers or investment advisers and still must comply with AML obligations under the BSA; the idea that there are no SAR requirements for fintechs is incorrect. AML regulations apply to a broad range of financial institutions, not just traditional banks.