MSB Registration in the US and Canada: What Crypto and Fintech Startups Need to Launch Legally

A payment or crypto startup completes MSB registration in the US, receives a registration number and assumes that it can begin serving customers across the United States. That assumption creates a serious licensing gap.

FinCEN registration places the business within the federal Bank Secrecy Act framework. It does not constitute regulatory approval, certify the company’s legitimacy or replace state authorization. A business that transmits money or monetary value must also determine whether it requires a money transmitter license in every state where it operates.

Montana does not regulate money transmitters at the state level. Most other states maintain licensing regimes, although the treatment of cryptocurrency and specific payment models differs by jurisdiction. Operating without a required state license can constitute a federal offense under 18 U.S.C. § 1960, in addition to violating state law.

Who Must Register With FinCEN

FinCEN defines an MSB under 31 CFR 1010.100(ff). The principal categories include dealers in foreign exchange, check cashers, issuers and sellers of money orders or traveler's checks, providers of prepaid access and money transmitters.

A business qualifies as a money transmitter when it accepts currency, funds or other value that substitutes for currency from one person and transmits it to another person or location. FinCEN applies this definition to administrators and exchangers of convertible virtual currency when their activities meet these criteria.