If you do transactions less than $1000 per day per person, as per FinCEN’s definition, you are NOT an MSB. Is that really the case? If you are below this threshold per person per day, are you NOT a Money Services Business? Really?
The FinCEN MSB Definition is provided at: https://www.fincen.gov/money-services-business-definition.
Hello. My name is Faisal Khan. I am a banking and a payment consultant. A question I get is, you know, that I’ve been to the FinCEN website and it says if you do less than a thousand dollars per day per person you are not an MSB. Is that correct?
Well, I am not a lawyer. So, first of all, I am not a lawyer so this is just my personal opinion. You can go ask a certified lawyer for their opinion and they will be happy to give you one provided you pay up for them.
My opinion is that you know this is a very vague statement. It’s something that the United States government has put out as a number a thousand dollars per day per person. You know, I don’t know how many people would want to see the need to send more than a thousand dollars. Let’s see if I have to send ten thousand dollars. I could do 500 hours a day for 20 days and you know I’d achieve that goal. But you are still doing money transmission. I think we have to look at it in the greater context of what the Bank Secrecy Act says. We have to look at it in a greater context of what money laundering acts might say or the patriot act may say, or the individual laws of each state for money transmission may say and those are deliberately made very vague so that if the government would like to penalize you or go after you because you went strictly against this definition they would find a clause by which they can say you know you are wrong you needed a money transmitter license and you say but, but, but, you know, the thousand, and they say no, you didn’t read this clause you didn’t read this clause.
So, my take on this thing is this clause should not be taken literally. Assume that this comes with many caveats, and those caveats require you to have money transmission. Even if you’re doing something where you don’t need a money transmitter license then the Bank Secrecy Act or the patriot act may come and say, well did you do KYC on this person, did you do reporting on this person, did you do an all fact check on this person and so forth. And if you’re not doing those things then they’ll get you from that end. So, if someone asks me, you know, I am a business and I if I do it under a hair line under 1000 dollars per day per customer limit, am I gonna be okay as, you know, not getting a license? My answer to that as always no you’re not going to be okay and please do not rely on that.
Like I said before this is my personal opinion. You may differ. You know and that’s OK. But in my opinion, I feel that you should not take this definition literally.
I hope I was able to give a little bit of explanation on this matter. If you have any more questions or comments there’s a link below to my contact form and you can fill that out and I’d be happy to look at it. Till next time, have a good one.