The Bank Secrecy Act and the anti-money-laundering rules built on it require US financial institutions — including money services businesses, which is how they reach crypto firms — to identify their customers, monitor for suspicious activity, keep records and file reports with FinCEN. It is the regime that turns identity verification and transaction monitoring from a product decision into a legal obligation.
BSA / AML
Statute United States
BSA and the AML rules are why a crypto exchange asks for a passport. Registering as a money services business brings customer identification, sanctions screening, transaction monitoring, recordkeeping and suspicious activity reporting — a set of obligations that generate enormous volumes of machine-processed data and almost no published interfaces.
- Customer identification - Know-your-customer programmes as a legal minimum rather than a risk preference.
- Sanctions screening - OFAC list checking on parties and, in this market, on wallet addresses.
- Transaction monitoring and SARs - Suspicious activity detection and reporting, on timelines that reward automation.
- Recordkeeping - Retention obligations that shape what a platform must be able to reconstruct.
- Reaches non-banks - The money services business definition is what pulls exchanges, custodians and payment firms into scope.
In The State of Blockchain & Crypto APIs this regime explains a segment: compliance, identity and risk vendors exist because these obligations do, and the market’s institutional tier — custody, stablecoins, regulated payments — publishes idempotency and error semantics at the highest rates in the cohort, because it answers to supervisors who ask what happened and when. The same tier publishes scopes at a fraction of that rate, which is the report’s open question rather than its conclusion.
Referenced in API Evangelist papers
This regulation shows up in my published research. These reports read the machine-readable evidence provider by provider — and put this regulation in the context of a real sector.
The State of Blockchain & Crypto APIs
Where a crypto firm is a money services business — and the reason the market's institutional tier behaves like a payments company while the rest of it does not.
