Designed for busy in-house counsel and compliance professionals, this newsletter summarizes the most important domestic and international Anti-Money Laundering (AML) regulatory and enforcement developments from the past few months, with links to primary resources and our client alerts.
On July 9, 2025, money-transmission regulators for six states[1] entered a coordinated consent order with Wise US, Inc. following a multistate examination to ascertain Wise’s compliance with applicable state and federal laws and regulations. The examination covered the period of July 1, 2022 to September 30, 2023, and identified compliance violations primarily related to the adequacy of Wise’s AML/CFT Program. Without admitting any wrongdoing, Wise agreed to pay a total administrative penalty of $4.2 million and to establish, implement, and maintain an updated AML/CFT compliance program, overseen by the state regulators.
Examiners reported that Wise’s AML/CFT Program failed to provide for independent review of the program with sufficient frequency, was deficient in its processes for investigating and timely reporting suspicious activity, faced data-integrity issues in transaction monitoring, was slow in remediating deficiencies in the program, and violated the Consumer Financial Protection Bureau’s Remittance Transfer Rule.
Wise represented to the regulators that it had already undertaken significant remediation efforts to prevent future violations and agreed to implement (or continue implementing) a series of measures to strengthen its AML/CFT program. Specifically, Wise agreed to enhance its AML/CFT transaction monitoring systems, strengthen its due diligence procedures, dedicate sufficient personnel and resources to ensure timely SAR filings, strengthen its program to ensure better data integrity, provide for periodic independent review of its AML/CFT program, and engage a third-party service provider to conduct independent testing of the AML/CFT program. Wise also agreed to provide written progress reports signed by a senior Wise office to the regulators for a two-year period.
On July 9, 2025, FinCEN announced an extension of the effective dates for three orders issued on June 25, 2025, under the FEND Off Fentanyl Act (FOFA). These orders were FinCEN’s first actions under its new authority to impose special measures against foreign financial institutions found to be “of primary money laundering concern” for facilitating fentanyl trafficking. The measures prohibit covered financial institutions from transmitting funds to or from three Mexico-based institutions: CIBanco S.A., Institución de Banca Múltiple (CIBanco), Intercam Banco S.A., Institución de Banca Múltiple (Intercam), and Vector Casa de Bolsa, S.A. de C.V. (Vector). (To learn more about FinCEN’s orders, read our July 2025 client alert.)
Under the original extended timeline, covered financial institutions had until September 4, 2025, to implement the prohibitions.
The original extension followed actions by the government of Mexico to address the concerns raised in FinCEN’s orders, including assuming temporary management of the affected institutions to enhance compliance and prevent illicit finance. Treasury stated that it will continue to coordinate closely with Mexican authorities and evaluate whether further extensions are warranted. FinCEN Director Andrea Gacki noted that Treasury “will continue to take every action necessary to protect the U.S. financial system from abuse by illicit actors and target the financing of transnational criminal organizations and narcotics traffickers.”
On August 19, 2025, Treasury issued a subsequent notice extending the effective date once more. Covered financial institutions now have until October 20, 2025, to implement the orders.
On July 3, 2025, the ECB and AMLA announced that they had signed a Memorandum of Understanding (MoU) outlining how the two institutions will cooperate and exchange information to enhance supervisory effectiveness and efficiency and to avoid duplication of efforts with respect to AML/CFT measures.
The ECB, as the central bank for European Union (EU) countries that use the euro, is responsible for prudential supervision of banks in the EU. AMLA is an EU agency established in 2024 to enhance AML/CFT supervision in the EU by enhancing cooperation among national authorities.
The MoU sets out principles for information exchange and collaboration between the ECB and AMLA to promote a more consistent AML/CFT supervisory approach across the EU. Under the MoU, in addition to overseeing the financial and non-financial sectors as a whole, AMLA will directly supervise certain “selected obliged entities,” a group of financial institutions particularly exposed to money laundering risks across borders. These include payment institutions, crypto-asset service providers, and some banks that are also under ECB supervision. The ECB and AMLA will work closely together, where appropriate, when taking supervisory measures related to internal controls, governance, and enforcement measures, which may include restrictions on business activities or withdrawal of licenses.
On July 4, 2025, MAS announced that it imposed S$27.45 million in penalties on nine financial institutions (and certain individuals) for AML violations connected to one of Singapore’s largest money laundering cases (the August 2023 Case). The penalties stem from MAS’s supervisory examinations of financial institutions that had relationships with the persons of interest in the August 2023 Case, which involved the seizure of over S$3 billion in illicit assets and led to the arrest and conviction of multiple foreign nationals for laundering proceeds from overseas criminal activities through Singapore.
The examinations, conducted from early 2023 to early 2025, revealed that although most institutions involved had established AML/CFT policies and controls, the breaches of MAS’s AML/CFT requirements happened because of poor or inconsistent implementation of those policies and controls. MAS identified the following shortcomings: (1) inadequate customer risk assessment processes that led to misrating of money laundering risks, affecting the institutions’ ability to apply appropriate controls; (2) failure to detect or follow up on red flags when establishing or corroborating customers’ source of wealth; (3) inadequate review of suspicious transactions flagged by the institutions’ own monitoring systems; and (4) insufficient risk mitigation measures following the filing of Suspicious Transaction Reports.
In addition to the monetary penalties, MAS issued prohibition orders ranging from three to six years against four individuals at a capital markets services license holder, which was also one of the nine institutions that received a financial penalty (S$2.4 million). These individuals had played a role in managing the financial institutions’ relationships with the persons of interest in the August 2023 Case. The prohibition orders resulted from two key failures by individuals: (1) failure to ensure that the institution’s AML/CFT controls kept pace with the company’s business growth; and (2) failure to raise red flags for suspicious information that would have warranted enhanced customer due diligence on multiple persons of interest involved in the August 2023 Case.
Separately, a number of employees at two other financial institutions were issued with reprimands for failing to comply with certain MAS AML/CFT requirements, including failure to provide sufficient practical guidance on how to establish customers’ source of wealth or to conduct or ensure proper due diligence or post-Suspicious Transaction Report follow-up.
On July 7, 2025, the FCA, which regulates financial services firms in the UK, published finalized guidance FG25/3 on the treatment of PEPs for AML purposes under the UK’s Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (UK Money Laundering Regulations). FG25/3 follows the FCA’s review of several FCA-regulated financial services firms and the public consultation it published in July 2024, following concerns raised by UK parliamentarians that banks may not have been treating domestic PEPs fairly. The guidance updates earlier 2017 FCA guidance.
The key takeaway from FG25/3 is that regulated firms must adopt a proportionate, risk-based approach to each PEP relationship rather than blanket enhanced due diligence measures. The guidance recognizes that not all PEPs pose the same level of risk and provides important clarifications concerning firms’ treatment of PEPs. Specifically, the guidance:
Overall, the guidance notes that a firm should not decline or terminate a relationship solely because an individual meets the definition of a PEP (or of a family member or close associate of a PEP).
Finally, in case you missed it, our July 2025 client alert reported that FinCEN announced its intention to postpone the effective date of the final rule establishing AML/CFT program and SAR filing requirements for certain investment advisers (the IA Rule) until January 1, 2028. The IA Rule, initially issued in August 2024, amends the Bank Secrecy Act’s definition of a “financial institution” to include certain registered investment advisers and exempt reporting advisers, imposing standards for AML/CFT programs and SAR requirements on these institutions.
So it comes as no surprise that, on September 19, 2025, FinCEN issued a notice of proposed rulemaking (NPRM) to amend the IA Rule to formally delay its effective date to January 1, 2028. In issuing this NPRM, FinCEN also said that the extension is meant to afford it “an opportunity to reduce any unnecessary or duplicative regulatory burden and ensure the IA AML Rule strikes an appropriate balance between cost and benefit.” Additional substantive amendments may follow before the IA Rule takes effect and this is a space we will continue to monitor.
To learn more about the IA Rule, please read our September 2024 client alert.
[1] California, Massachusetts, Minnesota, Nebraska, New York, and Texas.