Digital Asset Compliance
Crypto AML & BSA Compliance
Anti-money-laundering compliance is the program every licensed crypto business runs under the Bank Secrecy Act, and the program every licensing regulator reviews before approval. This guide maps the required pillars and what examiners actually test.
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Digital Asset Compliance
What AML compliance is required for a crypto business?
A US crypto business that holds or moves customer assets is generally required to run a written, risk-based Bank Secrecy Act anti-money-laundering program with four pillars: a designated compliance officer, written policies and procedures including risk-based customer identification, ongoing employee training, and independent testing. On top of the pillars sit the operating obligations: transaction monitoring calibrated to crypto typologies, suspicious activity reports (generally for suspicious transactions of $2,000 or more), currency transaction reports, OFAC sanctions screening, Travel Rule recordkeeping, and FinCEN registration renewed every two years. State licensing regulators review the program in every money transmitter application, so it generally must exist before the licenses do.
- What Is AML in Crypto?
- Anti-money-laundering compliance: the Bank Secrecy Act program a crypto business is generally required to run to detect and report illicit use of its platform. It covers a designated officer, written policies, customer identification, transaction monitoring, suspicious activity reporting, sanctions screening, training, and independent testing.
- Do All Crypto Businesses Need an AML Program?
- All US businesses that exchange, transmit, or custody digital assets for customers do, as money services businesses under FinCEN rules. Pure non-custodial software has historically fallen outside MSB status, but the analysis is fact-specific and should be confirmed with counsel.
Money transmitter licensing by the numbers
- US jurisdictions require a money transmitter license
- 51 of 52 US jurisdictions require a money transmitter license Source: state regulator statutes compiled in our state-law index, verified August 2026. Money transmitter license state laws
- statutory surety bond range across licensing states
- $10,000 to $1,000,000 statutory surety bond range across licensing states Source: state regulator statutes compiled in our state-law index, verified August 2026. Money transmitter license state laws
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The shortcut
The common approach is to scrape the web for an answer and hope it is current. When the rules change, or the page was wrong to begin with, the mistake surfaces as a deficiency after the filing is in, when it costs the most time.
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The Program Behind Every Crypto License
AML compliance for cryptocurrency is not a specialty add-on; it is the federal baseline for any business that exchanges, transmits, or custodies digital assets for customers. FinCEN classifies those businesses as money services businesses, which makes the Bank Secrecy Act's program requirements mandatory, and every state money transmitter application and New York BitLicense review evaluates the written program before granting a license. Cornerstone builds crypto AML programs as part of licensing engagements. This guide covers the required components, the crypto-specific tooling regulators now expect, and how the program is tested at application and examination time.
The Legal Stack: FinCEN, the BSA, and the States
The anti-money-laundering obligation reaches crypto through money services business classification. FinCEN's 2013 and 2019 guidance treats exchangers and administrators of convertible virtual currency as MSBs, which triggers registration on Form 107 and the full Bank Secrecy Act program requirement under 31 CFR Part 1022. That is the federal layer, and it applies whether or not any state has licensed you yet.
The states then make the same program a licensing condition: money transmitter applications require the written AML program, examiners test it after approval, and New York's BitLicense framework adds its own AML article with transaction monitoring guidance. The result is one program answering to two levels of review, which is why we draft it once, to the stricter standard, rather than maintaining separate federal and state stories.
The Required Program Components
Examiners organize their review around the BSA pillars and the reporting obligations that sit on them.
Designated Compliance Officer
A named BSA/AML officer with day-to-day authority, board access, and resources. Regulators interview this person during licensing and examinations; a figurehead fails the review.
Written Policies and Procedures
Risk assessment, customer identification and due diligence, monitoring rules, escalation paths, and recordkeeping, documented and matched to what the platform actually does.
Transaction Monitoring for Crypto Typologies
Rules calibrated to digital asset risks: mixers and tumblers, sanctioned protocols, darknet exposure, ransomware addresses, rapid pass-through, and structuring across wallets. Blockchain analytics integration is the expected tooling.
SARs and CTRs
Suspicious activity reports (FinCEN Form 111) within 30 days for suspicious transactions of $2,000 or more, and currency transaction reports for cash transactions over $10,000. SAR confidentiality is absolute.
Sanctions and the Travel Rule
OFAC screening of customers and counterparty wallets, and Travel Rule recordkeeping and transmission for transfers at or above the applicable threshold.
Training and Independent Testing
Documented employee training on a regular cadence and periodic independent testing of the program, internal audit or an outside reviewer, with findings tracked to closure.
How the AML Program Is Tested in Licensing
At application time, states read the program documents and probe them through deficiency letters. The recurring questions are concrete: who is the officer and what else do they do, which analytics vendor screens wallets and what rules are on, what are the EDD thresholds, when was the last independent test. New York's review is the deepest, holding BitLicense applicants to Part 200's AML article and the department's transaction monitoring and filtering guidance.
After approval, examinations sample the program in operation: real alerts, real SAR decisions with documented rationale, real training records. The common findings mirror the KYC side, paper policies the platform does not enforce, monitoring rules never tuned, SAR backlogs, and stale risk assessments. A crypto AML policy that matches production is the single best examination outcome predictor we see.
Banking partners run parallel diligence: an exchange's AML program is reviewed by every bank it approaches for accounts, so the same program that satisfies regulators is what keeps fiat rails open.
Compliance Programs, Not Investigations
A note on scope, because the search results around crypto AML mix two industries. Cornerstone builds and maintains compliance programs for businesses seeking and holding US licenses. We are not a blockchain forensics firm: we do not trace stolen funds, investigate crypto fraud, or provide expert-witness investigation services, and we do not sell analytics software. Where a program needs wallet-screening tooling, we help select and document established analytics vendors as part of the program build. If you need an investigator, you want a forensics specialist; if you need a program that gets your business licensed and keeps it examination-ready, that is exactly what we do.
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Money transmitter regulations by state
Money transmitter regulations by state
We are refreshing our state-by-state summaries for money transmitter. Browse the states we have published below.
- AlabamaRegulator: Alabama Securities CommissionLicense: yesBond: Not less than $100,000, or the average daily outstanding money-received-for-transmission obligations in Alabama plus 50% of average daily outstanding payment-instrument and stored-value obligations in Alabama, whichever is greater; commission may raise to a maximum of $5,000,000
- AlaskaRegulator: Alaska Department of Commerce, Community, and Economic Development, Division of Banking and SecuritiesLicense: yesBond: $25,000 plus $5,000 for each location, not exceeding a total addition of $125,000 (base + additions); department may raise to a maximum of $500,000 based on financial condition
- ArizonaRegulator: Arizona Department of Insurance and Financial InstitutionsLicense: yesBond: Greater of $25,000 or 100% of the licensee's average daily money transmission liability in Arizona (most recent three-month period), up to a maximum of $500,000; $25,000 if tangible net worth exceeds 10% of total assets
- ArkansasRegulator: Arkansas Securities DepartmentLicense: yesBond: Greater of $100,000 or 100% of the licensee's average daily money transmission liability in Arkansas (most recent three-month period), up to a maximum of $500,000; $100,000 if tangible net worth exceeds 10% of total assets
- CaliforniaRegulator: California Department of Financial Protection and Innovation (DFPI)License: yesBond: $250,000 to $7,000,000 for receiving money for transmission; selling or issuing payment instruments or stored value carries a separate $500,000 to $2,000,000 bond, and the two are cumulative
- ColoradoRegulator: Colorado Department of Regulatory Agencies, Division of BankingLicense: yesBond: Greater of $250,000 or 100% of the licensee's average daily money transmission liability in Colorado (most recent three-month period), up to a maximum of $1,000,000
- ConnecticutRegulator: Connecticut Department of BankingLicense: yesBond: Non-virtual-currency transmitters: not less than $300,000 (avg weekly transmissions < $300,000), $500,000 ($300,000-$500,000), or $1,000,000 (> $500,000); virtual-currency transmitters: amount set by the commissioner
- DelawareRegulator: Delaware Office of the State Bank CommissionerLicense: yesBond: $25,000, plus $5,000 for each location in excess of one, not to exceed $250,000 total
- District of ColumbiaRegulator: District of Columbia Department of Insurance, Securities and BankingLicense: yesBond: $50,000, increased by $10,000 per additional location, not to exceed $250,000 total
- FloridaRegulator: Florida Office of Financial RegulationLicense: yesBond: Amount specified by rule, but not less than $50,000 and not exceeding $2,000,000 (rule allows for financial condition, number of locations, and anticipated volume)
- GeorgiaRegulator: Georgia Department of Banking and FinanceLicense: yesBond: $250,000 minimum; the Department may require additional coverage, capped at $2,000,000
- HawaiiRegulator: Department of Commerce and Consumer Affairs, Division of Financial InstitutionsLicense: yesBond: $100,000 for the initial 12 months of licensure; commissioner may increase up to a maximum of $500,000 based on impaired financial condition
- IdahoRegulator: Idaho Department of FinanceLicense: yesBond: $10,000, increased by $5,000 per additional location/authorized representative, up to a maximum of $500,000
- IllinoisRegulator: Illinois Department of Financial and Professional Regulation, Division of Financial InstitutionsLicense: yesBond: Greater of $100,000 or 100% of average daily money transmission liability in Illinois for the most recently completed quarter, capped at $2,000,000
- IndianaRegulator: Indiana Department of Financial InstitutionsLicense: yesBond: Greater of $300,000 or the licensee's average daily money transmission liability in Indiana for the most recent calendar quarter, capped at $500,000
- IowaRegulator: Iowa Division of BankingLicense: yesBond: Greater of $100,000 or 100% of the licensee's average daily money transmission liability in Iowa for the most recent 3-month period, capped at $500,000
- KansasRegulator: Office of the State Bank CommissionerLicense: yesBond: Greater of $200,000 or 100% of the licensee's average daily money transmission liability in Kansas for the most recent 3-month period, capped at $1,000,000 (or $200,000 if tangible net worth exceeds 10% of total assets)
- KentuckyRegulator: Kentucky Department of Financial InstitutionsLicense: yesBond: At least $500,000; commissioner may increase up to a maximum of $5,000,000 based on financial condition, net worth, or transaction volume
- LouisianaRegulator: Louisiana Office of Financial InstitutionsLicense: yesBond: Minimum $100,000, up to a maximum of $500,000, or a higher amount deemed appropriate by the Commissioner up to a maximum of $1,000,000
- MaineRegulator: Bureau of Consumer Credit ProtectionLicense: yesBond: $100,000
- MarylandRegulator: Office of the Commissioner of Financial RegulationLicense: yesBond: Greater of $150,000 or 100% of the applicant's average daily money transmission liability in the State for the most recent quarter, capped at $2,000,000
- MassachusettsRegulator: Massachusetts Division of BanksLicense: yesBond: Greater of $100,000 or 100% of average daily money transmission liability in Massachusetts over the most recently completed three months, capped at $500,000
- MichiganRegulator: Department of Insurance and Financial Services (DIFS)License: yesBond: $500,000 for the first location, plus $10,000 for each additional location and authorized delegate, up to a maximum of $1,500,000
- MinnesotaRegulator: Minnesota Department of CommerceLicense: yesBond: Greater of $100,000 or 100% of the licensee's average daily money transmission liability in Minnesota (most recent 3-month period), capped at $500,000
- MississippiRegulator: Mississippi Department of Banking and Consumer FinanceLicense: yesBond: Greater of $100,000 or 100% of the licensee's average daily money transmission liability in Mississippi (most recent 3-month period), capped at $500,000 (commissioner may raise up to $1,000,000)
- MissouriRegulator: Missouri Division of FinanceLicense: yesBond: Greater of $100,000 or 100% of the licensee's average daily money transmission liability in Missouri (most recent 3-month period), capped at $500,000
- MontanaRegulator: Montana Division of BankingLicense: noBond: Not required (no state license needed)
- NebraskaRegulator: Nebraska Department of Banking and FinanceLicense: yesBond: Greater of $100,000 or 100% of the licensee's average daily money transmission liability in Nebraska (most recent 3-month period), capped at $500,000
- NevadaRegulator: State of Nevada Department of Business and Industry, Financial Institutions DivisionLicense: yesBond: Greater of $100,000 or 100% of average daily money transmission liability in Nevada (most recently completed quarter), capped at $500,000
- New HampshireRegulator: New Hampshire Banking DepartmentLicense: yesBond: Greater of $100,000 or 100% of the licensee's average daily money transmission liability in New Hampshire (most recent 3-month period), capped at $500,000
- New JerseyRegulator: New Jersey Department of Banking and InsuranceLicense: yesBond: Amount set by the Commissioner by regulation, not less than $100,000 and not more than $1,000,000 (money transmitter). Foreign money transmitters use a volume-based schedule starting at $25,000.
- New MexicoRegulator: New Mexico Regulation and Licensing Department, Financial Institutions DivisionLicense: yesBond: Greater of $300,000 or 1% of the licensee's total yearly dollar volume of money transmission business in New Mexico (or projected first-year volume), up to a maximum of $2,000,000
- New YorkRegulator: New York State Department of Financial ServicesLicense: yesBond: Set by the Superintendent of Financial Services for each licensee; New York Banking Law Article 13-B fixes no dollar amount, so confirm the required bond with DFS before relying on a figure
- North CarolinaRegulator: North Carolina Office of the Commissioner of BanksLicense: yesBond: $150,000 base (transmission volume in NC up to $1,000,000); increases with NC transmission volume (e.g., $175,000, $200,000, and higher tiers)
- North DakotaRegulator: North Dakota Department of Financial InstitutionsLicense: yesBond: Greater of $100,000 or 100% of the licensee's average daily money transmission liability in North Dakota (most recent 3-month period), capped at $500,000
- OhioRegulator: Ohio Department of Commerce, Division of Financial InstitutionsLicense: yesBond: Security device (surety bond or permitted alternative) of not less than $300,000, up to a maximum of $2,000,000 as the Superintendent finds appropriate
- OklahomaRegulator: Oklahoma State Banking DepartmentLicense: yesBond: $50,000 plus $10,000 per authorized-delegate location, not exceeding a total of $500,000
- OregonRegulator: Oregon Department of Consumer and Business Services, Division of Financial RegulationLicense: yesBond: $25,000, increased by $5,000 per additional location/authorized delegate (amount otherwise set by rule/Director)
- PennsylvaniaRegulator: Pennsylvania Department of Banking and SecuritiesLicense: yesBond: Bond in the penal sum of $1,000,000 (department may require additional bond based on average daily outstanding transmission balance)
- Puerto RicoRegulator: Puerto Rico Office of the Commissioner of Financial Institutions (OCIF)License: yesBond: $500,000 for a single office, increased by $10,000 per additional office or authorized agent (Commissioner may require a higher bond based on business volume/financial condition)
- Rhode IslandRegulator: Rhode Island Department of Business Regulation, Division of BankingLicense: yesBond: $50,000 (currency transmission licensees); department may accept an alternative security form if a surety bond is not commercially available at reasonable cost
- South CarolinaRegulator: South Carolina Attorney General (Commissioner under the South Carolina Uniform Money Services Act)License: yesBond: Greater of $100,000 or 100% of average daily money transmission liability in South Carolina (most recent 3 months), capped at $500,000; alternatively $100,000 if tangible net worth exceeds 10% of total assets
- South DakotaRegulator: South Dakota Division of BankingLicense: yesBond: Greater of $100,000 or 100% of average daily money transmission liability in South Dakota (most recent 3 months), capped at $500,000; alternatively $100,000 if tangible net worth exceeds 10% of total assets
- TennesseeRegulator: Tennessee Department of Financial InstitutionsLicense: yesBond: Greater of $50,000 or 100% of average daily money transmission liability in Tennessee (most recent calendar quarter), capped at $800,000
- TexasRegulator: Texas Department of BankingLicense: yesBond: Greater of $100,000 or 100% of average daily money transmission liability in Texas (most recent 3 months), capped at $500,000; alternatively $100,000 if tangible net worth exceeds 10% of total assets
- UtahRegulator: Utah Department of Financial InstitutionsLicense: yesBond: Flat minimum surety bond of $50,000
- VermontRegulator: Vermont Department of Financial RegulationLicense: yesBond: Greater of $100,000 or 100% of average daily money transmission liability in Vermont (most recent 3 months), capped at $2,000,000
- VirginiaRegulator: Virginia State Corporation Commission, Bureau of Financial InstitutionsLicense: yesBond: Greater of $100,000 or 100% of average daily money transmission liability in Virginia for the most recent quarter, capped at $1,000,000; a flat $100,000 where tangible net worth exceeds 10% of total assets
- WashingtonRegulator: Washington State Department of Financial InstitutionsLicense: yesBond: Surety bond based on prior year's money transmission and payment instrument dollar volume; minimum $10,000, not to exceed $550,000
- West VirginiaRegulator: West Virginia Division of Financial InstitutionsLicense: yesBond: $300,000 for money transmission; $100,000 for check or money-order sale or currency exchange; increased by 1% of annual West Virginia volume over $10 million, capped at $1,000,000
- WisconsinRegulator: Wisconsin Department of Financial InstitutionsLicense: yesBond: Greater of $100,000 or 100% of average daily money transmission liability in Wisconsin (most recent 3 months), capped at $500,000
- WyomingRegulator: Wyoming Division of BankingLicense: yesBond: $10,000 or 2.5 times outstanding payment instruments, whichever is greater, not to exceed $500,000
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Stay Ahead of the Rules
Recent rule changes, deadline announcements, and state agency updates we are tracking for you.
- Action Multistate Settlement Aug 19, 2026
August 2026 Monthly Settlement with NewRez LLC
State financial regulators announced a nearly $15. 5 million settlement with NewRez LLC related to improperly charged insurance.
- Watch New York DFS NY Aug 19, 2026
DFS Pre-Proposed Amendment to 23 NYCRR 400
The DFS posted a pre-proposed second amendment to 23 NYCRR 400 on August 13, 2026; comments are due by August 24, 2026.
- Action NMLS Aug 19, 2026
New NMLS Information Requests and Notification Changes
August 2026 updates include new Information Requests and notification options for individuals within the NMLS system.
- Watch FinCEN Aug 19, 2026
FinCEN Proposed Rule for AML/CFT Reforms
On April 7, 2026, FinCEN proposed reforms to AML/CFT program requirements affecting MSBs and financial institutions.
- Action California DFPI CA Aug 18, 2026
California Debt Collection Licensing Act Updates
California continues to enforce its Debt Collection Licensing Act, maintaining rigorous licensing and examination protocols for debt collectors and debt buyers. The DFPI supervises compliance closely.
Stand Up an AML Program That Passes Review
Your AML program is reviewed by FinCEN rules, every state application, and every banking partner. We build it once, to the stricter standard, as part of your licensing project. Talk with our team.