MSB license in USA

MSB license in USA - фото 44172Daria Lysenko
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Launching payment business from scratch.

The United States financial market remains the most prestigious and lucrative in the world. For fintech startups, crypto exchanges, and payment providers, entering this market is a massive milestone. However, the regulatory landscape is often described as a “minefield.”

The most common confusion lies in the terminology: MSB (Money Services Business) versus MTL (Money Transmitter License). Misunderstanding the difference between federal registration and state-level licensing can lead to severe fines or business shutdowns.

At SBSB Fintech Lawyers, we specialize in navigating these complexities. This guide will walk you through the exact steps to obtain an MSB license in the USA, explain the critical role of FinCEN, and detail the requirements for cryptocurrency businesses in 2026.

What is an MSB (Money Services Business)?

Under the Bank Secrecy Act (BSA), a Money Services Business (MSB) is a legal term used by the US financial regulator, FinCEN (Financial Crimes Enforcement Network).

You are classified as an MSB if your company conducts more than $1,000 in business with one person in one day in one or more of the following capacities:

    • Currency Dealer or Exchanger: Exchanging fiat or crypto currencies.
    • Money Transmitter: Transferring funds from one person/location to another.
    • Check Casher: Cashing checks for customers.
    • Issuer or Seller of Traveler’s Checks or Money Orders.
    • Provider of Prepaid Access: Issuing prepaid cards or crypto wallets.
    • Crucial Note: If you are dealing with cryptocurrency, you are almost certainly an MSB under current US laws.

The Critical Distinction: FinCEN Registration vs. MTL License

This is the part where 80% of new businesses get confused. To operate legally, you often need to satisfy two layers of regulation: Federal and State.

1. Federal Level: FinCEN Registration (The “MSB License”)

This is often what people mean when they say “MSB License,” though technically, it is a registration, not a discretionary license.

Regulator: FinCEN (US Department of the Treasury).

Process: Mandatory for all MSBs. It involves filing Form 107 and establishing an AML compliance program.

Timeline: Relatively fast (4–5 months).

2. State Level: Money Transmitter License (MTL)

If your business involves transferring money (Money Transmission) or maintaining control over customer funds (Custody), federal registration is not enough. You must obtain a license in every individual state where you have customers (e.g., New York, California, Texas).

Regulator: State Department of Banking / Financial Services.

Process: Extremely rigorous. Requires surety bonds, minimum capital, and deep background checks.

Timeline: Long (6–12 months per state).

Expert Insight: Startups often begin with FinCEN registration to establish a legal entity and then apply for MTLs in strategic states as they grow. 

MSB License in the USA for Crypto Companies: 2026 Requirements

Since 2013, FinCEN has clarified that businesses exchanging or transferring “Convertible Virtual Currency” (CVC) are Money Services Businesses.

If you run a Crypto Exchange, Bitcoin ATM, or a Custodial Wallet, you must:

  1. Register with FinCEN.
  2. Comply with the “Travel Rule” (sharing data on transactions over a certain threshold).
  3. Implement KYC (Know Your Customer) procedures.

What about DeFi and Non-Custodial Wallets?

This is a grey area. Generally, if you do not hold private keys and never take custody of user funds, you might be exempt from MTL, but FinCEN guidance is evolving. Consult with sb-sb.com lawyers to assess your specific business model.

Step-by-Step Guide to Obtaining an MSB License in the USA

Here is the roadmap we use for our clients at SBSB Fintech Lawyers:

Step 1: US Company Incorporation

You cannot register as a US MSB without a US legal entity. We typically recommend registering a C-Corp or LLC in Delaware or Wyoming due to their business-friendly laws.

Step 2: Obtaining an EIN

You need a Federal Employer Identification Number (EIN) from the IRS. This serves as your company’s tax ID.

Step 3: Developing a BSA/AML Compliance Program

This is the most important document. Before you file with FinCEN, you must draft a written Anti-Money Laundering program that includes:

  • Internal controls and policies.
  • Designation of a Compliance Officer.
  • Employee training program.
  • Independent audit schedule.

Step 4: Filing Form 107 (FinCEN Registration)

We submit the Registration of Money Services Business (RMSB) via the BSA E-Filing System. Once accepted, your company will appear in the public MSB Search database.

Step 5: State Licensing (MTL) – If Applicable

If your business model requires it, we begin the application process via NMLS (Nationwide Multistate Licensing System) for the target states.

Need more information about the MSB License in USA?
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Key Requirements for Registration MSB License in USA

To successfully register and maintain your status, you need:

  1. Local Presence: A registered office in the US (not just a P.O. Box).
  2. Compliance Officer: A qualified individual responsible for your AML program. They do not always have to be US-resident, but they must be competent.
  3. Clean Background: Beneficiaries and directors must pass background checks.
  4. Bank Account: While not strictly required for the paper registration, you cannot operate without one. Note: Opening a bank account for an MSB is difficult. We assist our clients with crypto-friendly banking solutions.

USA MSB License: Cost and Timeline

  • FinCEN Registration:

Timeline: 2 to 6 weeks for preparation and filing.

Cost: Affordable. The main costs are legal fees for drafting the AML policy and incorporation.

  • State MTL Licenses:

Timeline: 4 to 12 months.

Cost: High. Application fees range from $1,000 to $5,000 per state, plus surety bonds (freezing 100k – 100k – 500k depending on the state).

Why Choose SBSB Fintech Lawyers for Your USA MSB License?

Navigating US financial regulations requires more than just filling out forms. It requires a strategy.

At SBSB Fintech Lawyers, we offer a turnkey solution:

  • Strategic Analysis: We determine if you really need an MTL or if FinCEN registration is sufficient for your MVP.
  • Crypto Expertise: We understand blockchain, DeFi, and CEX models.
  • Banking Support: We leverage our network to help you open accounts in crypto-friendly banks and EMIs.
  • Ongoing Support: We don’t just register you; we help with annual renewals and compliance audits.

Ready to launch your fintech business in the USA? Contact us today for a consultation.

FAQ

Yes. You do not need to be a US citizen. However, you must incorporate a US legal entity and appoint a Compliance Officer (who can sometimes be outsourced).

No. An MSB registration allows you to transmit money or exchange currency. It does not allow you to accept deposits for lending purposes like a bank.

FinCEN registration is federal and covers the whole USA regarding AML compliance. However, it does not replace state-level Money Transmitter Licenses (MTL), which must be obtained separately in each state where you operate.

The federal registration is cost-effective (legal fees apply). However, full coverage with MTLs in 50 states can cost over $500,000 in fees and legal work. Most startups begin with FinCEN and a few key states.

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MSB license in USA - фото 44172
Daria Lysenko

Senior lawyer

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Valeriia Kozel

Customer manager

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