Monthly Regulatory Summary (August 2025)

As the regulatory landscape is constantly evolving, CRC-Oyster is issuing its monthly review and summary of various FINRA, SEC, NFA, and FinCEN publications to assist our clients in keeping abreast of notable regulatory developments and deadlines in an effort to strengthen their compliance and regulatory initiatives.

FINRA

Regulatory Notices

Per Election Notice 08/15/25, FINRA rules require members to provide associated persons with specified information relating to the uniform registration forms and predispute arbitration. FINRA has observed that members currently satisfy some of these requirements through manual processes, such as delivery of the information via U.S. mail. As part of the FINRA Forward initiatives, FINRA has made enhancements to its systems to give members the option of satisfying these requirements electronically via FINRA’s Financial Professional Gateway (FinPro Gateway^TM) beginning November 3, 2025.¹

Questions concerning this Notice should be directed to:

• Afshin Atabaki, Vice President and Associate General Counsel, Office of General Counsel (OGC), by email or (202) 728-8902; 
• Bill Swanstrom, Vice President, Credentialing, Registration, Education and Disclosure, by email or (240) 386-4731;
• John Nachmann, Associate General Counsel, OGC, by email or (240) 386-4816; or
• Nick Vitalo, Assistant General Counsel, OGC, by email or (646) 315-8474.

Background & Discussion

This Notice is part of the FINRA Forward initiatives, which are intended to, among other things, modernize FINRA’s rules, guidance and processes and empower member compliance.² In Regulatory Notice 25-07 (April 14, 2025) (RN 25-07), FINRA requested comment on modernizing its rules, guidance and processes for the organization and operation of member workplaces, including specifically requesting comment regarding ways to employ FINRA’s systems to address practical issues members experience when delivering to associated persons documents required under FINRA rules (such as the requirement to provide a copy of the Form U5 (Uniform Termination Notice for Securities Industry Registration) to associated persons whose registrations with the member have been terminated) and to create efficiencies for its members or provide improved functionality. 

As discussed in RN 25-07, FINRA previously leveraged FinPro Gateway to streamline the work associated with the onboarding of applicants for registration by allowing applicants to collaborate with members to complete a draft Form U4 (Uniform Application for Securities Industry Registration or Transfer) and to electronically sign it.³

In the spirit of continuous improvement, FINRA has now developed additional enhancements to its systems to enable members to provide Form U4, Form U5  and predispute arbitration information to associated persons via FinPro Gateway. This will give members the option of satisfying their regulatory obligations through FINRA systems in a more timely and efficient manner. In addition, members that currently use manual processes to provide this information to associated persons may realize cost savings by using FinPro Gateway instead. As discussed in greater detail below, using FinPro Gateway for these purposes is optional and members and associated persons that use FinPro Gateway for these purposes would need to satisfy certain conditions, including an acknowledgement by associated persons that they may receive the required information via FinPro Gateway.

FINRA is also reviewing the comments received in response to RN 25-07 and is evaluating additional ways that it can leverage its systems to support member compliance.

Members’ Obligations to Provide Form U4, Form U5 and Predispute Arbitration Information to Associated Persons

The following FINRA rules require members to provide associated persons with information relating to the uniform registration forms and predispute arbitration. FINRA has observed that members currently use manual processes (such as using a third-party service that offers delivery confirmation) to satisfy some of these obligations.

FINRA Rule 1010(c)

Rule 1010(c) (Form U4 Filing Requirements) addresses the filing and signature requirements for initial, transfer and amended Form U4s. For any amendments to the disclosure information on an associated person’s Form U4 (e.g., regulatory actions), Rule 1010(c)(1) requires a member to file with FINRA an amended Form U4 that is based on a signed copy of the form provided to the member by the associated person prior to the filing.⁴ Alternatively, pursuant to Rule 1010(c)(2), the member may file the amended Form U4 after it uses reasonable efforts to provide the associated person with a copy of the amended disclosure information and, prior to the filing, obtains a written acknowledgment (which may be electronic) from the associated person that the associated person has received and reviewed the amended disclosure information. If the member cannot obtain either the signature or written acknowledgment of the associated person prior to the filing, Rule 1010(c)(3) allows the member to proceed with filing the amended disclosure information as to which it has knowledge and use reasonable efforts to provide the associated person with a copy of the amended disclosure information that was filed with FINRA.⁵

For any amendments to the administrative information on an associated person’s Form U4 (e.g., work and residential location), Rule 1010(c)(4) allows a member to file such amendments without obtaining the signature or written acknowledgment of the associated person. However, the rule requires the member to use reasonable efforts to provide the associated person with a copy of the amended administrative information that was filed with FINRA.

Article V, Section 3 of the FINRA By-Laws

Article V, Section 3 of the FINRA By-Laws (Notification by Member to the Corporation and Associated Person of Termination; Amendments to Notification) requires a member to submit to FINRA an initial Form U5 within 30 calendar days of terminating an associated person’s registration and an amended Form U5 within 30 calendar days after the member learns of facts or circumstances giving rise to an amendment to such individual’s Form U5. This provision also requires the member to provide a copy of the initial and, if any, amended Form U5 to the individual whose registration was terminated.

FINRA Rule 2263

FINRA Rule 2263 (Arbitration Disclosure to Associated Persons Signing or Acknowledging Form U4) requires a member to provide each associated person with certain written disclosures regarding the nature and process of arbitration proceedings whenever the firm asks an associated person, pursuant to Rule 1010(c), to sign a Form U4 or to acknowledge in writing information filed on the form.

Use of FinPro Gateway to Satisfy Delivery Obligations

As part of FINRA’s efforts to further leverage FINRA systems to support member compliance, FINRA has developed technological enhancements to its systems to allow members to provide the Form U4, Form U5 and predispute arbitration information discussed above to associated persons in a more efficient and timely manner via FinPro Gateway. These enhancements will also benefit associated persons by affording them a secure, central location to access this information in a timely manner. These enhancements will be implemented starting on November 3, 2025.⁶ However, the use of FinPro Gateway for these purposes will be optional for both members and associated persons.

In addition, FINRA will not assess any charges to those members that rely on FinPro Gateway to provide the required information to associated persons. Therefore, members that use FinPro Gateway to satisfy these obligations may experience cost savings compared to using other methods, such as delivery via a third-party service.

For members to rely on FinPro Gateway to provide Form U4, Form U5 and predispute arbitration information to associated persons, members and associated persons must meet the following conditions:

1. the associated person must create a FinPro Gateway account, which includes providing a valid personal email address and an optional business email address;
2. the member must make reasonable efforts to validate the email addresses linked to the associated person’s FinPro Gateway account (for example, by requiring the associated person to validate his or her FinPro Gateway email addresses as part of an annual attestation process);
3. the member must notify the associated person in writing that the member will rely on FinPro Gateway to provide, as may be the case, copies of Form U5s pursuant to Article V, Section 3 of the FINRA By-Laws, predispute arbitration information pursuant to Rule 2263, or amended Form U4 information pursuant to Rules 1010(c)(2), (c)(3) or (c)(4);
4. the associated person must acknowledge to the member that he or she may receive the required information via FinPro Gateway; and
5. the member must elect through FinPro Gateway to provide to the associated person the required information.⁷

Further, once a member provides the required information to an associated person via FinPro Gateway, FINRA will notify the associated person through his or her FinPro Gateway personal email address (and his or her FinPro Gateway business email address, if provided by the associated person) that the information is available for viewing. For monitoring purposes, members will also have the option of requesting that FINRA send a copy of these emails to an email address provided by the member, such as to the member’s compliance department.

Conclusion

FINRA believes that enabling members to satisfy their obligations to provide Form U4, Form U5 and predispute arbitration information to associated persons via FinPro Gateway will allow members to meet these obligations in a more cost efficient and timely manner. This will also benefit associated persons by allowing them to receive the information in a timely manner and in a centralized and secure location. As discussed above, the use of FinPro Gateway for these purposes will be optional and available at no additional cost.

In addition, as noted above, as part of the FINRA Forward initiatives, FINRA requested comment in RN 25-07 on how to further leverage its systems to support member compliance with regulatory requirements and reduce unnecessary burdens. FINRA is currently reviewing the comments received in response to that Notice and will continue to explore ways that it can leverage its systems, including additional enhancements to FinPro Gateway, to support member compliance.

Per Election Notice 08/14/25, FINRA is providing information in this Notice to remind registered persons and firms of the continuing education (CE) requirements, including:

• this year’s Regulatory Element training assignments and completion deadline of December 31, 2025;
• resources available to firms for facilitating compliance with the annual Regulatory Element requirements; and
• resources available to guide firms creating their CE Firm Element written training plans and to help firms locate relevant course content to meet their training needs.

Questions concerning this Notice should be directed to:

• Patricia Monterosso, Senior Director, Testing and Continuing Education Department, at (212) 858-4086 or email;
• Genay Glasgo, Director, Testing and Continuing Education Department, at (561) 443-7985 or email; or
• Nicole Lefort, Associate Director, Testing and Continuing Education Department, at (212) 858-5247 or email.

Background

Effective January 1, 2023, FINRA adopted amendments to the CE rules in support of the Securities Industry Regulatory Council on Continuing Education’s (CE Council) recommendations. Among these changes, registered persons are required to satisfy both the Regulatory Element and Firm Element annually.

Also, based on a recommendation from the CE Council, FINRA launched a centralized catalog of CE content, Financial Learning Experience^TM (FLEX^TM), on July 1, 2024, that serves as an optional resource for firms to select relevant Firm Element e-Learning courses for use in their written learning plans for their registered persons.

Regulatory Element

FINRA Rule 1240 (Continuing Education) requires all registered persons to complete the Regulatory Element annually by year end for each registration they hold.¹ The 2025 Regulatory Element courses have been assigned and must be completed by December 31, 2025. Dropping or adding a registration may result in a change to the assigned courses included in a learning plan.

Registered persons who fail to complete their Regulatory Element by the annual December 31 deadline will be automatically designated as CE inactive by FINRA.²

Firms may request that FINRA extend the time by which a registered person must complete the Regulatory Element for good cause shown.³

To complete their Regulatory Element, registered persons must access assigned courses on the CE platform through their Financial Professional Gateway (FinPro) account. FinPro users should verify that their information—including email addresses and phone numbers—is current, accurate and complete in the system. Keeping information up to date will help ensure that they receive all appropriate notifications. Existing FinPro users who have forgotten their FinPro user ID or password can recover their information on the FinPro account recovery page. Support for FinPro and the CE platform is available Monday through Friday from 8 a.m. to 8 p.m. ET. FINRA will provide a notice on the Systems Status page when these systems are unavailable.

The course topics for the 2025 learning plans are published on FINRA’s View a Regulatory Element Learning Plan page. Firms can use the interactive tool on this page to view the course topics assigned to a registration category or group of registration categories for a given calendar year. The published course topics may also assist firms when preparing their Firm Element training plans. See additional information about this resource below.

Firm Element

In addition to the Regulatory Element requirements, firms must maintain a CE program, the Firm Element, for their registered persons to enhance their securities knowledge, skills and professionalism.⁴ Firms must, at least annually, evaluate and prioritize their training needs and develop a written training plan for the Firm Element. The training plan must take into consideration the firm’s size, organizational structure and scope of business activities, as well as regulatory developments and the completion of Regulatory Element by registered persons. If a firm’s analysis establishes the need for supervisory training for persons with supervisory responsibilities, such training must be included in the firm’s training plan.

FINRA Rule 1240 allows firms to consider training relating to the anti-money laundering (AML) compliance program and the annual compliance meeting toward satisfying an individual’s annual Firm Element requirement.

CE Content Catalog

FINRA has developed an online, centralized content catalog, Financial Learning Experience (FLEX), which firms may optionally leverage for administering education and training for their Firm Element programs or other training needs. The platform currently includes courses FINRA developed and may include courses from third-party training providers and other self-regulatory organizations (SROs) in the future. Firms have the option of using the courses in the catalog for their Firm Element training, but are not obligated to select content from the catalog.

Resources

FINRA and the CE Council have developed reports, tools and guidance documents as resources to support firms with their CE requirements. These resources are highlighted below.

FINRA Gateway: FINRA has enabled settings and created reports within FINRA Gateway to assist firms in complying with the Regulatory Element requirements:

• Option to Set and Display an Earlier CE Completion Deadline: Firms have the option to set and require an earlier deadline than December 31 for individuals to complete their Regulatory Element courses. Firm-based CE due dates can be set in FINRA Gateway’s Firm Settings to be included in FINRA automated CE Notifications. FINRA has introduced the option for firms to display their earlier completion due date in FinPro along with the SRO Regulatory Element due date of December 31. Firms can select to display the earlier completion due date in automated Regulatory Element notifications, FinPro or both locations. More information on configuring the display is available in the Firm Settings Guide.
• Sending Automated CE Notifications: Firms can schedule automated Regulatory Element notifications to be sent to registered persons in FINRA Gateway’s Firm Settings. These include Regulatory Element due date notifications and CE status change emails. Firms also have the option to send automated email notifications to their registered persons regarding an earlier completion deadline, if one is selected. For more information on configuring notifications, see the Firm Settings Guide. FINRA will send notifications to the email addresses that registered persons have provided in their FinPro account. Firms can elect to receive a copy of the CE notifications FINRA sends to their registered persons.
• Monitoring Tools: Throughout the year, firms can monitor the CE statuses of their registered persons by using the Annual Regulatory Element templates in FINRA Gateway Reports. More information on these customizable templates is available on FINRA Gateway’s Annual CE Obligations page.
• Ensuring Access to FinPro: To identify registered persons without an active FinPro account, firms can use the FinPro Access Tracking report template available in FINRA Gateway. Set the filter for the “Is FinPro User” field to “No” when using the template.

FinPro: Registered persons who do not currently have a FinPro account can create an account on the FinPro registration page. For guidance, they may refer to the FinPro account creation guide.

Registered persons who may have to reactivate a dormant account should allow several business days to do so. Additionally, they should allow sufficient time to complete their assigned Regulatory Element learning plan by the December 31 due date.

Annual Regulatory Element Learning Topics: By October of each year, the Regulatory Element learning topics for the coming year will be available on FINRA.org. The 2025 learning topics for each registration category have been published, and the 2026 learning plan topics will be published later this year. Firms can view a Regulatory Element learning plan assigned to a registration category or group of registration categories for a given calendar year. This information is provided in advance so that firms may consider it when preparing their Firm Element training plans.

• New for 2026:
  • Topics being considered by FINRA and the CE Council for coverage in the 2026 Regulatory Element learning plans have been announced. More information on these topics will be available by October 2025, including which topics will be assigned to each registration category, the course title and course description.
  • Updates have been made to the registration groupings to further enhance relevancy and registration specificity. For example, certain limited sales representative registrations have been moved from the “Sales Representative” category to a newly created “Limited Sales Representative” category.
  • Estimated completion times for the 2025 courses have been added to each course description.

CE Council Publications: The CE Council regularly publishes the following documents to assist firms in designing their Firm Element training plans:

• Firm Element Needs Analysis Quarterly Highlights assists firms with identifying potential topics to include in their Firm Element training plans. Topics are identified from a review of industry, regulatory and SRO announcements; publications of significant events; and the annual report from FINRA’s Examination and Risk Monitoring Program.
• CE Council Guide to Firm Element Continuing Education Programs supports the development of a Firm Element program that addresses regulatory requirements and assists firms with the creation of their annual needs analysis and written training plan.
• Firm Element Needs Analysis Template, available for download in PDF, Word and Excel formats, is designed to assist firms in establishing a Firm Element training plan by providing a starting point for planning, developing and implementing a program.
• CE Council Firm Element FAQs are provided as a helpful starting point to walk firms through planning, developing and implementing their Firm Element programs.

Per Regulatory Notice 25-08, In their FINRA has adopted amendments to exempt business development companies (BDCs) from FINRA Rule 5130 (Restrictions on the Purchase and Sale of Initial Equity Public Offerings) and from paragraph (b) (Spinning) of FINRA Rule 5131 (New Issue Allocations and Distributions). The amendments maintain the integrity of the public offering process while facilitating vibrant capital markets by expanding access to initial public offerings (IPOs) through a highly regulated entity. The amendments will become effective on July 23, 2025.

The text of the rule change is set forth in Attachment A.

Questions concerning this Notice should be directed to:

• Afshin Atabaki, Vice President and Associate General Counsel, Office of General Counsel (OGC), by email or (202) 728-8902;
• Ilana Herscovitz Reid, Associate General Counsel, OGC, by email or (202) 728-8268; or
• Britny Auletti, Assistant General Counsel, OGC, by email or (212) 858-4039.

SEC

Final Rules

There were no final rules in August.

Proposed Rules

There were no proposed rules in August.

Interim Final Rules

There were no interim final rules in August.

Interpretive Releases

There were no interpretive releases in August.

Policy Statements

There were no policy statements in August.

Concept Releases

There were no concept releases in August.

NFA

Notices to Members

There were no notices to members in August.

NFA News Releases

There were no news releases in August.

FinCEN

FinCEN News Releases

FinCEN Issues Advisory and Financial Trend Analysis on Chinese Money Laundering Networks

August 28, 2025

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) is raising the alarm on Chinese money laundering networks (CMLNs), which pose a significant threat to the U.S. financial system. FinCEN is issuing: (1) an Advisory to urge financial institutions to be vigilant in detecting the use of CMLNs by Mexico-based drug cartels, including several designated as Foreign Terrorist Organizations; and (2) a Financial Trend Analysis (FTA) highlighting the scope and breadth of CMLN activity in the United States.

“Money laundering networks linked to individual passport holders from the People’s Republic of China enable cartels to poison Americans with fentanyl, conduct human trafficking, and wreak havoc among communities across our great nation,” said Under Secretary for Terrorism and Financial Intelligence John K. Hurley. “The United States will not stand by and allow nefarious actors to launder illicit proceeds through our financial system. Today’s publication of FinCEN’s Advisory and Financial Trend Analysis reinforce Treasury’s and law enforcement’s ongoing work to combat Chinese money laundering networks, and will help financial institutions better identify signs of illicit activity.”

“Chinese money laundering networks are global and pervasive, and they must be dismantled,” said FinCEN Director Andrea Gacki. “These networks launder proceeds for Mexico-based drug cartels and are involved in other significant, underground money movement schemes within the United States and around the world. FinCEN’s Advisory and Financial Trend Analysis support Treasury’s continuing efforts, alongside our law enforcement and international partners, to bankrupt transnational criminal organizations and their enablers.”

Bank Secrecy Act Reports Highlight Breadth of Chinese Money Laundering Networks in the United States

• As discussed in the FTA , FinCEN analyzed 137,153 Bank Secrecy Act (BSA) reports filed by financial institutions between January 2020 and December 2024 (the dataset) associated with suspected CMLN-related activity, totaling approximately $312 billion in suspicious transactions.
• CMLNs, as discussed in the Advisory and FTA, play a significant role in laundering proceeds from drug trafficking. CMLNs are also involved in facilitating a range of additional illicit activity, including fraud, human trafficking, and human smuggling.
• Private individuals carrying passports from the People’s Republic of China (PRC) play a significant role in these networks and may wittingly or unwittingly assist CMLNs launder money on a global scale.

CMLNs Are Being Utilized by Cartels to Launder Illicit Proceeds

• CMLNs are professional money launderers and are heavily utilized by Mexico-based cartels to launder drug proceeds in the United States.
• The business relationship between CMLNs and Mexico-based drug cartels is driven in part by laws passed by the Government of Mexico and the PRC that restrict financial flows.
• Mexico’s currency restrictions prevent large amounts of U.S. dollars from being deposited into Mexican financial institutions, hindering the cartels’ ability to launder funds through the formal Mexican financial system. The PRC’s currency control laws limit the amount of money Chinese citizens can transfer abroad each year.
• U.S.-based CMLNs may sell U.S. dollars purchased from Mexico-based drug cartels through advertisements on social media or by leveraging personal networks involving Chinese citizens and/or businesses seeking to evade the PRC’s currency control laws.
• Ultimately, Chinese citizens’ demand for large quantities of U.S. dollars and the cartels’ need to launder their illicit U.S. dollar proceeds has resulted in a mutualistic relationship wherein the cartels sell off their illicitly obtained U.S. dollars to CMLNs who, in turn, sell the U.S. dollars to Chinese citizens seeking to evade China’s currency control laws.

CMLNs Are Involved in Other Types of Illicit Activity

• Financial institutions filed 1,675 BSA reports in the dataset indicating suspicious activity potentially involving human trafficking or human smuggling.
• Financial institutions filed 43 BSA reports in the dataset involving approximately $766 million in suspicious activity, on 83 adult and senior day care centers, all of which listed addresses in New York.
• FinCEN also identified 108 BSA reports in the dataset involving deposited funds potentially associated with healthcare fraud, elder abuse, and suspicious gaming activity.

CMLNs Use a Variety of Methods to Launder Proceeds, and May Recruit Employees Inside Financial Institutions

• To launder illicit cartel funds, CMLNs often utilize trade-based money laundering, money mule, and mirror transaction methodologies.
• CMLNs may recruit financial institution employees to act as complicit insiders or infiltrate and place CMLN members within a financial institution to assist in CMLN operations.
• CMLNs may also provide money mules with counterfeit Chinese passports to facilitate account opening and engage in other illicit financial behavior.

CMLNs Are Potentially Facilitating Real Estate Purchases Funded by Illicit Proceeds from a Variety of Financial Crimes

• Financial institutions filed 17,389 BSA reports in the dataset associated with more than $53.7 billion in suspicious activity involving the real estate sector.
• CMLNs may use money mules or shell companies to purchase real estate, which may serve as an investment for the CMLN or a wealthy China-based client of the CMLN.
• CMLNs potentially play a key role in laundering illicit funds through U.S. real estate by using complex, layered transactions; involving third parties; and ultimately, integrating illicit proceeds into the real estate sector to launder ill-gotten gains.
• CMLNs potentially target high-value markets and leverage Chinese investors who have strong interest in U.S. real estate.

FinCEN is Issuing Key Indicators of Illicit Activity linked CMLNs to Alert Financial Institutions

• FinCEN has identified red flags to help financial institutions detect, prevent, and report suspicious activity connected to CMLNs laundering illicit proceeds.
• In situations where the money mules are opening accounts, these money mules may report their occupation during the account onboarding process as “student,” “housewife,” “retired,” “laborer,” or other occupations that typically do not engage in large volumes of transactions, which may bring about suspicions as to why these accounts have large volumes of unexplained wealth.
• Please read the full advisory for a comprehensive list of red flag indicators.

FinCEN’s Advisory is available online at: https://www.fincen.gov/system/files/2025-08/FinCEN-Advisory-CMLN-508.pdf

FinCEN’s FTA is available online at: https://www.fincen.gov/system/files/2025-08/4000-10-INV-144549-S3F6L-FTA-CMLN-508.pdf

Treasury Extends Effective Dates of Orders Issued Under New Authority to Counter Fentanyl

August 19, 2025

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) extended the effective dates for orders issued on June 25, 2025, prohibiting certain transmittal of funds involving three Mexico-based financial institutions. Covered financial institutions will now have until October 20, 2025, to implement the orders prohibiting certain transmittal of funds involving CIBanco S.A., Institución de Banca Multiple (CIBanco), Intercam Banco S.A., Institución de Banca Multiple (Intercam), and Vector Casa de Bolsa, S.A. de C.V. (Vector), each of which FinCEN found to be of primary money laundering concern in connection with illicit opioid trafficking pursuant to the Fentanyl Sanctions Act and the FEND Off Fentanyl Act.

“Treasury and the Government of Mexico continue to make progress in joint efforts to safeguard our financial institutions and economies from terrorist cartels and their money laundering activities,” said FinCEN Deputy Director Jimmy Kirby. “This close partnership plays a critical role in Treasury’s comprehensive efforts to protect the U.S. financial system from criminal abuse and target the financing of transnational criminal organizations and narcotics traffickers.”

This extension reflects continued steps taken by the Government of Mexico to meaningfully address the concerns raised in FinCEN’s orders, to include maintaining temporary management of the affected institutions to promote regulatory compliance and the prevention of illicit finance. Treasury will continue to coordinate closely with the Government of Mexico on these matters and will carefully consider all facts and circumstances with respect to the implementation of the orders.

• Today’s order by FinCEN can be found here.
• Links to FinCEN’s original orders can be found here.
• Frequently Asked Questions can be found here.
• Questions about the orders should be directed to www.fincen.gov/contact.

Treasury Issues Request for Comment Related to the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act

August 18, 2025

The U.S. Department of the Treasury issued a Request for Comment required by the GENIUS Act, which furthers the Administration’s policy of supporting the responsible growth and use of digital assets, as outlined in Executive Order (E.O.) 14178 on “Strengthening American Leadership in Digital Financial Technology.” This request for comment offers the opportunity for interested individuals and organizations to provide feedback on innovative or novel methods, techniques, or strategies that regulated financial institutions use, or could potentially use, to detect illicit activity involving digital assets. In particular, Treasury asks commenters about application program interfaces, artificial intelligence, digital identity verification, and use of blockchain technology and monitoring. As required by the GENIUS Act, Treasury will use public comments to inform research on the effectiveness, costs, privacy and cybersecurity risks, and other considerations related to these tools.

Treasury News Release: https://home.treasury.gov/news/press-releases/sb0228

Federal Register Notice: https://www.federalregister.gov/documents/2025/08/18/2025-15697/request-for-comment-on-innovative-methods-to-detect-illicit-activity-involving-digital-assets

READOUT: FinCEN Convenes Public-Private Partnership to Promote Innovation and Address Fraud and Scam Risks in the Digital Assets Ecosystem

August 06, 2025

On July 15, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) brought together Treasury components, law enforcement agencies, financial institutions, regulatory technology companies, and trade groups to share insights on driving innovation in the digital assets ecosystem while protecting consumers from emerging fraud and scam threats. The FinCEN Exchange event, titled “Advancing Digital Assets Innovation While Safeguarding Consumers Against Fraud and Scam Risks,” featured comprehensive discussions on industry trends in innovation, developments in fraud and scam prevention, law enforcement’s active role in deterring financial crimes facilitated by the illicit use of digital assets, and compliance best practices in the digital assets ecosystem. As digital asset adoption continues to expand across the financial sector, this event highlights the critical importance of balancing technological advancement with robust compliance and consumer protection measures.

This FinCEN Exchange event represents a continuation of Treasury’s commitment to fostering dialogue between government agencies and private sector partners to combat financial crimes while supporting innovation. The event supported Executive Order 14178, which strengthens American leadership in digital financial technology. FinCEN continues to work closely with digital asset industry partners to develop effective strategies for detecting, preventing, and reporting suspicious activities. FinCEN encourages financial institutions to stay informed of evolving digital asset risks by reviewing FinCEN’s relevant guidance and advisories.

FinCEN Issues Notice on the Use of Convertible Virtual Currency Kiosks for Scam Payments and Other Illicit Activity

Immediate Release

August 04, 2025

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a Notice urging financial institutions to be vigilant in identifying and reporting suspicious activity involving convertible virtual currency (CVC) kiosks. While CVC kiosks can be a simple and convenient way for consumers to access CVC, they are also exploited by illicit actors, including scammers. The risk of illicit activity is exacerbated if CVC kiosk operators fail to meet their obligations under the Bank Secrecy Act (BSA).

“Criminals are relentless in their efforts to steal money from victims, and they’ve learned to exploit innovative technologies like CVC kiosks,” said FinCEN Director Andrea Gacki. “The United States is committed to safeguarding the digital asset ecosystem for legitimate businesses and consumers, and financial institutions are a critical partner in that effort. This Notice supports Treasury’s continuing mission to counter fraud and other illicit activities.”

Illicit activity involving CVC kiosks includes fraud, certain types of cybercrime, and drug trafficking organization activity, which are three of FinCEN’s Anti-Money Laundering and Countering the Financing of Terrorism National Priorities.

Today’s Notice provides an overview of typologies associated with illicit activity involving CVC kiosks. In particular, it highlights the rise in scam payments facilitated by CVC kiosks, including tech and customer support scams and bank imposter scams. Some of these scams disproportionately impact older adults. The Notice highlights red flag indicators and reminds financial institutions of their reporting requirements under the BSA.

Questions regarding the contents of this advisory should be sent to the FinCEN Regulatory Support Section by submitting an inquiry at www.fincen.gov/contact.

The full Notice is available online at FIN-2025-NTC1.

Hot Issue

Chairman Paul Atkins of the SEC has withdrawn 14 major proposed rules introduced under the prior administration, including those addressing ESG disclosures, climate risk reporting, artificial intelligence in financial advice, decentralized exchange definitions, and cybersecurity obligations. This sweeping action is widely seen as a landmark shift toward mandate-focused regulation, favoring traditional investor protection and emphasizing cost benefit analysis and public input over the expansive agenda advanced by former Chair Gary Gensler. While many industry participants have welcomed the change as a move toward regulatory clarity, others caution that the withdrawals may weaken essential safeguards. The development has become a central focus across the compliance industry, with firms reevaluating controls and revisiting assumptions built around now defunct proposals. This is not a time to be reckless or overly reactive, but rather a moment to remain observant, flexible, and focused on protecting investors through sound, principles-based programs.

Our Perspective

We believe that being informed is essential to any proactive regulatory compliance program. Awareness of shifts in the regulatory landscape allows firms to adjust thoughtfully rather than reactively, ensuring they remain aligned with both current expectations and emerging risks. At the same time, we recognize the practical challenge of balancing this commitment with the demands of day-to-day business execution, particularly during a period of heightened uncertainty and rapid change. Our goal is to help firms navigate these complexities with clarity, pragmatism, and a steady focus on investor protection and long-term program integrity.

For more information, please contact:

Mitch Avnet

p. (646) 346-2468  

[email protected]

David Amster

p. (917) 568-6470

[email protected]

Sources:

• FINRA Notices
• SEC Notices
• NFA Notices
• FinCEN News Releases