FinCEN Calls for Heightened Vigilance Among Money Services Businesses Against Emerging Financial Threats

Here’s the final article:

fincen Warns MSBs: Vigilance Required for Cross-Border Transfers Involving Non-citizens

Washington D.C. – November 29, 2025 – The Financial Crimes Enforcement Network (FinCEN), a bureau within the Treasury Department, issued an alert on Friday, November 28, reminding money services businesses (MSBs) to heighten their vigilance when reporting suspicious activity tied to cross-border transfers originating from individuals lacking legal status in the United States.

While acknowledging that the “vast majority” of remittances from the U.S.to foreign residents are legitimate, the alert highlighted the potential for fraudsters to exploit low-dollar cross-border fund transfers for illicit activities.

MSBs are legally obligated to file a suspicious activity report (SAR) for any transaction of at least $2,000 where they suspect a violation of law or regulation.The alert specifically emphasizes that this includes cross-border fund transfers derived from unlawful employment or funds the MSB knows, suspects, or has reason to suspect were obtained illegally in the U.S. by non-citizens.

FinCEN underscored the “significant volume of cross-border funds transfers” in recent years and has taken steps this year to address associated risks, as stated in a Friday press release.

“Money services businesses should be vigilant in identifying suspicious financial activity involving illegal aliens who present significant threats to national security and public safety,” stated John K. Hurley,Under Secretary for Terrorism and Financial Intelligence. “At Treasury, we will continue to protect the American people by faithfully upholding the laws of the United States.”

This alert follows a warning issued in August by FinCEN, which highlighted the activities of Chinese money laundering networks transferring funds across borders, fueling operations of Mexican drug cartels.

How does FinCEN’s advisory specifically impact Money Services Businesses (MSBs) regarding ransomware payment facilitation?

Understanding teh Recent FinCEN Advisory

The Financial Crimes Enforcement Network (FinCEN) has issued a critical advisory, urging Money Services Businesses (MSBs) – including check cashers, money transmitters, and currency exchangers – to bolster their defenses against a surge in sophisticated financial crimes.This isn’t a drill; the landscape of financial threats is rapidly evolving, demanding proactive measures from all involved in the money services industry. The advisory specifically highlights increased exploitation of MSBs by illicit actors involved in ransomware attacks, human trafficking, and sanctions evasion.

Key Emerging Financial Threats Identified by FinCEN

FinCEN’s alert details several concerning trends impacting MSBs. Staying informed about these is the first step in effective mitigation:

* Ransomware Payment Facilitation: Cybercriminals are increasingly leveraging MSBs to convert ransom payments (frequently enough in cryptocurrency) into fiat currency. This involves complex layering techniques to obscure the origin of funds.

* Human Trafficking & Exploitation: MSBs are being used to move funds related to human trafficking operations, often disguised as legitimate transactions. Recognizing red flags is crucial.

* Sanctions Evasion: Illicit actors are attempting to circumvent international sanctions by utilizing MSBs to process transactions on behalf of sanctioned entities or individuals.

* Fraudulent Unemployment claims: msbs have seen a rise in transactions linked to fraudulently obtained unemployment benefits, frequently enough involving identity theft.

* Digital Asset Mixing Services: The use of cryptocurrency mixers and tumblers to obfuscate the source and destination of funds is a growing concern.

Enhanced Due Diligence: A Core Requirement

Responding to these threats requires a significant upgrade in AML compliance (Anti-Money Laundering) practices. FinCEN emphasizes the need for enhanced Customer Due Diligence (CDD) and Know Your Customer (KYC) procedures.

Here’s a breakdown of essential steps:

1. Risk Assessment Updates: Regularly review and update your MSB’s risk assessment to reflect the current threat landscape. Focus on identifying vulnerabilities specific to your business model and customer base.
2. Transaction Monitoring: Implement robust transaction monitoring systems capable of detecting suspicious activity, including unusual transaction patterns, large cash deposits, and transactions involving high-risk jurisdictions. Utilize AML software to automate this process.
3. Suspicious activity reporting (SAR): Ensure all employees are thoroughly trained on identifying and reporting suspicious activity. Prompt and accurate SAR filing is paramount.
4. Beneficial Ownership Verification: Scrutinize the beneficial ownership of legal entity customers to uncover hidden connections to illicit actors.
5. Geographic Risk Considerations: Pay close attention to transactions involving countries identified as high-risk for money laundering or terrorist financing.

Practical Tips for MSBs to Strengthen Security

Beyond the core compliance requirements, several practical steps can substantially enhance your MSB’s security posture:

* Employee Training: Conduct regular, thorough training for all employees on identifying and reporting suspicious activity, understanding current fraud schemes, and adhering to AML regulations.

* Cybersecurity Measures: Invest in robust cybersecurity infrastructure to protect against data breaches and ransomware attacks. This includes firewalls, intrusion detection systems, and regular security audits.

* Independent Testing: Engage an independent third party to conduct regular testing of your AML program to identify weaknesses and ensure effectiveness.

* Collaboration & Details Sharing: Participate in industry forums and information-sharing initiatives to stay abreast of emerging threats and best practices.

* Implement Multi-Factor Authentication (MFA): MFA adds an extra layer of security to access critical systems and data.

Real-world Example: The Rise of Ransomware-as-a-service

The proliferation of Ransomware-as-a-Service (RaaS) has dramatically lowered the barrier to entry for cybercriminals. Previously,launching a ransomware attack required significant technical expertise. Now, affiliates can purchase ransomware kits and infrastructure from developers, making attacks more frequent and widespread. MSBs have become a key component in the money laundering process for these attacks, converting ransom payments into usable funds. This highlights the need for MSBs to be notably vigilant regarding large, unexplained cryptocurrency transactions.

The Role of Technology in Combating Financial Crime

RegTech (Regulatory Technology) solutions are playing an increasingly crucial role in helping MSBs meet their AML obligations. These technologies include:

* AI-powered Transaction Monitoring: Artificial intelligence and machine learning algorithms can analyze vast amounts of transaction data to identify patterns indicative of illicit activity.

* Automated KYC/CDD: Automated tools can streamline the KYC/CDD process, reducing manual effort and improving accuracy.

* Blockchain Analytics: Tools that analyze blockchain transactions can help trace the flow of funds and identify suspicious activity related to cryptocurrency.

* Sanctions Screening: Automated sanctions screening tools ensure compliance with international sanctions regulations.

Benefits of Proactive Compliance

Investing in robust AML compliance isn’t just about avoiding penalties; it’s about protecting your business and the financial system as a whole.

* reduced Risk of Penalties: non-compliance with AML regulations can result in significant fines and legal repercussions.

* Enhanced Reputation: A strong AML program demonstrates a commitment to ethical business practices and builds trust with customers and regulators.

* Improved Security: enhanced security measures protect your business from cyberattacks and financial losses.