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Does a fintech based outside the US need to register as an MSB?

Checked against the cited sources: October 2026

It can. Under the rules of FinCEN (the Financial Crimes Enforcement Network, the US Treasury bureau that administers the Bank Secrecy Act), a money services business (MSB) is a person "wherever located" doing business "wholly or in substantial part within the United States" in an MSB capacity, such as money transmission. So a company with no US office can still be an MSB that generally must register with FinCEN. Whether your activity counts as being in the United States depends on all the facts.

The rule looks at activity, not location

The definition applies "whether or not on a regular basis or as an organized or licensed business concern" (31 CFR 1010.100(ff)).

FinCEN's crypto guidance says its requirements apply to foreign-located crypto money transmitters doing business "in whole or in substantial part within the United States," even with no physical US presence (FIN-2019-G001, section 3).

Two questions come first

1. Do you offer an MSB service? The categories are money transmission, which has no dollar threshold; dealing in foreign exchange, check cashing, and issuing or selling money orders or traveler's checks, each only above $1,000 for any one person on any day, in one or more transactions; and providing or selling prepaid access, each with its own conditions (31 CFR 1010.100(ff)(1)-(5), (7)). Money transmission means accepting currency, funds or other value that substitutes for currency from one person and transmitting it to another person or place, by any means (31 CFR 1010.100(ff)(5)). The definition has narrow limitations, such as for some payment processors and for funds moved "only integral" to selling your own goods or services (31 CFR 1010.100(ff)(5)(ii); FIN-2019-G001, section 2); see our payment processor guide.

2. Is that activity wholly or in substantial part within the United States? The rule sets no percentage or dollar test. FinCEN said the answer "depends on all of the facts and circumstances of each case, including whether persons in the United States are obtaining MSB services from the foreign-located person" (76 FR 43588).

FinCEN agreed that a foreign business's "mere maintenance of a bank account in the United States" should not by itself make it an MSB (76 FR 43588). But FinCEN's 2009 proposal meant to include one "transmitting money through the account with U.S. customers or recipients" (74 FR 22133).

Questions to ask:

  • Do people in the United States send or receive money through you?
  • Do you have an agent, branch or office in the United States?
  • Do you use a US account to move money for US customers or recipients?

Each yes points toward coverage. The rule itself counts a US agent, branch or office (31 CFR 1010.100(ff)); for the rest, FinCEN weighs all the facts.

Exclusions that matter for foreign firms

The MSB definition does not include "[a] bank or foreign bank" (31 CFR 1010.100(ff)(8)(i)). It also excludes a foreign financial agency whose activities, if done in the United States, would require it to register with the Securities and Exchange Commission or the Commodity Futures Trading Commission (31 CFR 1010.100(ff)(8)(ii)).

A foreign bank is "[a] bank organized under foreign law" or a bank's agency, branch or office outside the United States (31 CFR 1010.100(u)). A foreign financial agency is, roughly, a person acting outside the United States for others as a financial institution or agent in money, credit, securities or gold (31 CFR 1010.100(v)). A foreign payment or e-money license is not on the list.

If you are a foreign-located MSB

  • Register with FinCEN on Form 107 within 180 days after the business is established, and renew every two years (31 CFR 1022.380(a)(1), (b)(2)-(3)). FinCEN's crypto guidance counts a money transmitter's 180 days from when it starts money transmission (FIN-2019-G001, section 2.1).
  • Name a US agent for legal process. You must designate "a person who resides in the United States and is authorized, and has agreed, to be an agent to accept service of legal process," and give a US address for your registration records (31 CFR 1022.380(a)(2)).
  • Keep records in the United States. Keep a copy of your registration and registration number at a US location for five years (31 CFR 1022.380(b)(1)(iii); 1010.430(d)), and your list of agents at the US location on your registration (31 CFR 1022.380(d)(1)).
  • Meet the same program and reporting rules for your US activity. FinCEN said foreign-located MSBs have "the same reporting and recordkeeping and other requirements" as US-based MSBs "with respect to their activities in the United States" (76 FR 43589). That includes an anti-money laundering (AML) program (31 CFR 1022.210), suspicious activity reports (31 CFR 1022.320, except check-casher-only MSBs) and funds transfer rules for transmittals of $3,000 or more (31 CFR 1010.410).

Among the narrow registration exceptions, a business that is an MSB only because it acts as another MSB's agent, and one that is an MSB only as a seller of prepaid access and is not already an agent, do not register. Each still needs an AML program (31 CFR 1022.380(a)(1), (a)(3); 1022.210(a)). A prepaid program's participants must pick one provider, which must register; if none registers as provider, the provider is whoever has principal oversight and control, a question of facts in which organizing the program is one sign (31 CFR 1010.100(ff)(4); 1022.380(a)(1)). See our registration and agents guides.

Penalties

Doing business without a required registration is unlawful, and each day is a separate violation (31 CFR 1022.380(e)). Knowingly running an unregistered money transmitting business is a federal crime (18 U.S.C. 1960).

State licenses are a separate question

The state regulators' model law, the CSBS Money Transmission Modernization Act, defines money transmission to include "[r]eceiving money for transmission from a person located in this state," which looks to where the customer is. CSBS says more than half of the states have enacted it "in full or in part," so check each state where you have customers. Running a money transmitting business without a license a state requires, where that is a state misdemeanor or felony, is also a federal crime (18 U.S.C. 1960(b)(1)(A)).

A note on stablecoins

The GENIUS Act adds a separate federal regime for payment stablecoins. In short, these are digital assets used for payment that the issuer must convert, redeem or repurchase for a fixed amount of monetary value, such as dollars (section 2(22); full definition in our crypto guide). The Office of the Comptroller of the Currency (OCC) says the Act takes effect January 18, 2027.

From that date, "It shall be unlawful for any person other than a permitted payment stablecoin issuer to issue a payment stablecoin in the United States" (section 3(a)). A permitted issuer must be "a person formed in the United States" and approved by a federal or state regulator (sections 2(11), 2(23), 2(31)). Exceptions include limited safe harbors that Treasury may provide and the section 18 exception below (sections 3(c), 18(a)).

Platforms, such as exchanges and custodians ("digital asset service providers"), face two more rules:

  • From January 18, 2027. They may not offer, sell or make available in the United States a foreign issuer's payment stablecoin unless the issuer can comply, and will comply, with lawful orders and any reciprocal arrangement Treasury makes with a jurisdiction whose stablecoin rules are comparable (sections 3(b)(2), 18(d)).
  • From July 18, 2028. They may not offer or sell a payment stablecoin to a person in the United States unless a permitted issuer issued it. Exceptions include limited safe harbors and section 18 (sections 3(b)(1), 3(c)).

Section 3's prohibitions do not apply to a foreign issuer that meets all of these: Treasury has found its home regulator's regime comparable to the Act's; it is registered with the OCC; it holds reserves in a US financial institution sufficient for US customers' liquidity demands, unless a reciprocal arrangement permits otherwise; and its home country is not under comprehensive US sanctions or found by Treasury to be of primary money laundering concern (section 18(a)).

Section 3 is "intended to have extraterritorial effect if conduct involves the offer or sale of a payment stablecoin to a person located in the United States" (section 3(e)), meaning it can reach conduct outside the United States.

What to do next

Sources

This guide is general information, not legal advice. Forteris is not a law firm.

Last checked: October 2026

Short answers

Can a company with no US office be a money services business?

Yes. FinCEN's MSB definition covers a person "wherever located" doing business wholly or in substantial part within the United States in an MSB capacity, and FinCEN has said its requirements apply to foreign-located crypto money transmitters doing business in whole or in substantial part within the United States, even without a physical US presence. Whether a given business is covered depends on all the facts, including whether people in the US send or receive money through it. The money transmitter definition also has narrow limitations, such as for some payment processors and for funds accepted and transmitted only integral to selling the business's own goods or services, and FinCEN reads them strictly.

What extra registration steps apply to a foreign-located MSB?

Unless an exception applies, it registers with FinCEN like other MSBs, but it must also designate a person who lives in the United States, and has agreed, to accept service of legal process for it, and give a US address for its registration records. In plain terms, that person formally receives legal papers for the business, so US law enforcement and regulators can reach it. It must keep a copy of its registration and registration number at a US location for five years, and keep its agent list at the US location reported on its registration. The registration exceptions are narrow. Under the two most relevant here, a business that is an MSB only because it acts as another MSB's agent, or only as a seller of prepaid access that is not already an agent, does not register, though it still needs an AML program. (The registration rule also does not apply to the US Postal Service or to federal, state or local government agencies.) "Seller" is a narrow term in the rule: a business counts as a seller of prepaid access only under the conditions in 31 CFR 1010.100(ff)(7). A business that organizes or controls a prepaid program may, on the facts, be that program's provider, and a provider must register.

Does having a US bank account make a foreign business an MSB?

Not by itself. In its 2011 final rule, FinCEN agreed that a foreign business's mere maintenance of a US bank account should not make it an MSB, citing a 2004 ruling on a foreign currency exchanger whose exchanges took place solely abroad for foreign customers and whose US account was used only to issue and clear dollar-denominated instruments. The final rule's test is whether the business does business in an MSB capacity, such as money transmission, wholly or in substantial part within the United States. That depends on all the facts and circumstances, including whether people in the US obtain MSB services from it, such as sending money to or receiving money from third parties through it. For more on the activities that count, the final rule points to FinCEN's 2009 proposed rule, which said FinCEN meant to include, for instance, a business transmitting money through a US account with US customers or recipients. A foreign-located MSB has the same reporting, recordkeeping and other requirements as a US-based MSB for its US activities, and must designate a US-resident agent to accept service of legal process.

General information, not legal advice. Checked against the cited primary sources in October 2026.