USA LAW AND PRACTICE Contributed by: Margo H.K. Tank, Michael Fluhr, Era Anagnosti, Kristin Boggiano, David Stier, Liz S. M. Caires, Adam Dubin, Emily Honsa Hicks, Kathleen Birrane and Chezelle McDade, DLA Piper LLP
regulators, like CFTC and SEC. SROs can impose fines and suspend or revoke licenses. There is cur - rently no SRO for digital assets. Accounting and audit - ing firms play an important role in ensuring compli - ance with financial reporting standards. 2.13 Conjunction of Unregulated and Regulated Products and Services Offering an unregulated product or service in conjunc - tion with regulated products and services could put the offeror at risk of regulator scrutiny for both prod - ucts. Companies may want to set up separate entities to streamline compliance of regulated products. 2.14 Impact of AML and Sanctions Rules AML, countering the financing of terrorism (CFT), and sanctions rules impact fintechs in a meaningful and often resource-intensive way. Developing thoughtful, risk-based compliance programmes pre-launch and assessing the adequacy of such programmes are important steps to avoid facilitating criminal conduct and minimise the risk that a company will become the target of a regulatory or criminal investigation. FinCEN, OFAC, the State Department, Commerce Department and various components of DOJ regulate and/or pros - ecute AML and sanctions or export control violations. Additionally, banking and money transmission regula - tors at the state level have their own regulatory and licensing regimes which may be applicable to fin - techs, including AML. OFAC guidance provides that US sanctions compliance obligations apply equally to cryptocurrencies and fiat currency transactions. Cryptocurrency industry members are responsible for ensuring that they do not engage, directly or indirectly, in transactions prohibited by OFAC. Additionally, there is often liability for non-US persons who “facilitate” sanctions violations by US persons. 2.15 Financial Action Task Force (FATF) Standards As it relates to fintechs, the AML/CFT and sanctions rules in the USA generally follow the standards and guidelines set forth by the FATF. FATF “Recommenda - tions” are not binding on its member nations, including the US. FATF Recommendations and the principles underlying the US regulatory regime share fundamen -
tal concepts, including that the US and FATF generally require certain entities to register or be licensed. FATF identified as an area of improvement the US’s delay in establishing a comprehensive beneficial own - ership information reporting regime to combat the use of shell companies. Although the US Congress endeavoured to address these concerns with the 2021 Corporate Transparency Act (the CTA), the CTA took a long time to implement. In early 2025, the new admin - istration’s Treasury Department significantly limited the beneficial ownership reporting requirements which now only impact non-US-registered companies. The FATF Travel Rule requires covered virtual asset ser - vice providers (VASPs) to convey information regard - ing the identity of the payment sender and recipient to other VASPs and financial institutions. The FATF Travel Rule has a reporting threshold of USD1,000, and requires the provision of detailed information about the originator and beneficiary of the transaction. FinCEN adopted the US Funds Travel Rule which requires financial institutions, including money servic - es businesses, to transmit basic information regard - ing the sender and recipient (not detailed information) with the transmittal of funds equal to or greater than USD3,000. Fintech compliance with the FATF and the US Travel Rules continues to present significant chal - lenges, eg, the lack of standards across countries and “Reverse solicitation” is an approach made by an existing or prospective customer to a financial ser - vices provider, where the provider has not actively encouraged the customer to contact the provider. The concept of reverse solicitation exists in the USA, but it is not a codified legal principle. Depending upon the state, and at the federal level, reverse solicitation may be permissible where the provider can demon - strate that the relationship was genuinely customer- initiated. Despite the benefits of reverse solicitation, foreign service providers may still face regulatory scrutiny and must be prepared to provide documentation to differing implementation dates. 2.16 Reverse Solicitation
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