Financial Crimes Enforcement Network (FinCEN)

What Does FinCEN Stand For?

FinCEN stands for the Financial Crimes Enforcement Network. FinCEN is a bureau of the U.S. Department of the Treasury. The most important mission of FinCEN is to protect the financial system from crimes like money laundering, terrorist financing, and more. It achieves this by collecting, analysing, and sharing financial intelligence with officials of regulators and law enforcement. FinCEN supports its compliance efforts with regulations like the Bank Secrecy Act (BSA) and the Corporate Transparency Act (CTA). In this blog post, we’ll be explaining in detail the efforts FinCEN put forth, and how to best comply with its regulations.

History of FinCEN

FinCEN was established in 1990 in the U.S. The bureau is linked to the U.S. Department of the Treasury. This was at first a small unit which was only used for the analysis of financial data, and it was done to prevent money laundering. The establishment is now the official Financial Intelligence Unit (FIU) of the United States. Patriot Act of 2001 helped expand the duties and authority of FinCEN. The unit now oversees the enforcement of the BSA, as well as collaborating with financial institutions to better the compliance standards. The FBI relies heavily on BSA filings for investigations into financial crime, organized crime drug trafficking and international terrorism, with 16%-40% of investigations linked to SARs or CTRs in fiscal year 2024, depending on the crime. 

What Are the Goals of FinCEN?

FinCEN aims to protect the U.S. financial system from attacks and crime. Primarily, the unit tries to detect financial crime before it occurs to try and prevent it, sharing the findings later with related institutions. FinCEN also monitors emerging threats by analysing the financial data it previously collected from companies like yours. The unit later informs law enforcement agencies and regulators to help them coordinate better. More than 87% of investigations recommended for prosecution by the criminal investigation arm of the IRS over 2023 and 2024 had a related Bank Secrecy Act filing, according to the year-in-review report published by FinCEN.  The criminals are faced with more difficulties while trying to exploit others, thanks to FinCEN’s prevention efforts.

What Is the Role of FinCEN?

We’ve previously talked about the primary goal of FinCEN, let’s now talk more about how the unit works to achieve this goal. FinCEN is tasked with collecting and utilising financial intelligence. This involves analysing reports like Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs) which helps identify threats, emerging crime trends, and potential offenses. FinCEN’s reporting and industry summaries indicate roughly 4.7 million SARs were filed by financial institutions in fiscal year 2024.  FinCEN also enforces the BSA since banks, money services businesses (MSBs), and other covered entities need to comply with AML laws. Next, the bureau promotes collaboration between key shareholders. Data sharing via Section 314(a) between banks and law enforcement is encouraged since criminals exploit the lack of communication between parties and investigations are slowed down because of the same reason. With its rising popularity, cryptocurrency usage is now monitored by FinCEN as well. The regulations are done under BSA to help fight AML risks that can occur in digital platforms.

Key Laws and Regulations Enforced by FinCEN

There are several laws and regulations in play when it comes to fighting anti money laundering and terrorist financing. FinCEN’s first enforcement comes with the Bank Secrecy Act (BSA), which was enacted in 1970. The act requires financial firms to keep records, file reports when necessary, and monitor odd activity. The USA PATRIOT Act of 2001 has added to the authority of FinCEN. Customer due diligence (CDD) was enhanced, additional reporting requirements were implemented, and a closer oversight of financial firms was reached thanks to this act. 

The Anti-Money Laundering Act of 2020 was an important update to the AML compliance framework FinCEN previously established. The act modernized AML enforcement and it did this by introducing stricter obligations for compliance, whistleblower protections, and encouraging the implementation of enhanced tools for detection of financial crime. The most recent development to the unit was made by the implementation of the Corporate Transparency Act (CTA). The act mandates the reporting of beneficial ownership information (BOI) to FinCEN, hoping to achieve better protection against shell companies.

FinCEN issued orders in June, 2025 that identified three Mexico-based financial institutions as being of primary money laundering concern in connection with illicit opioid trafficking. The orders represent the first time FinCEN has used its authority under the Fentanyl Sanctions Act and the FEND Off Fentanyl Act. This shows the scope of FinCEN’s law enforcement powers.

Differences Between OFAC and FinCEN

FinCEN and OFAC are both involved in financial regulation, while also being under the U.S. Treasury umbrella. They sure have their differences, and we’ll detail them now for our readers. Firstly, these two have different roles. FinCEN serves as the FIU of United States, and the focus of the unit is anti-money laundering (AML) enforcement. OFAC, on the other hand, deals more with economic and trade sanctions to protect the country’s national security and foreign policy interests. Their focus areas differ as well, since they operate as separate bureaus under the same department. FinCEN focuses mostly on detection of money laundering, terrorist financing, and financial crime in general, whereas OFAC is mainly interested in sanctions compliance, asset blocking, and restricting transactions with prohibited entities or countries. 

FinCEN operates with the BSA, the AMLA, and the CTA. The laws linked to OFAC are the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA). One other area we should cover is the entities these bureaus regulate. FinCEN oversees banks, MSBs, and crpyto platforms. OFAC has more of a coverage in this category, with the bureau’s regulations applying to all U.S. persons and entities. The bureau asks of these entities a full adherence to sanctions lists like the Specially Designated Nationals (SDN) List. 

Finally, we’ll compare the reporting requirements these bureaus demand. FinCEN collects information like SARs, CTRs, and BOI to help track financial crime. FinCEN’s year-in-review report, for example, shows 20.5 million CTRs were filed by financial institutions in FY2024.  OFAC uses sanctions programs to ensure compliance is reached by firms. 

What Are Financial Institutions Required to Do Under FinCEN?

There are obligations that financial institutions need to follow to be compliant with FinCEN rules. Your company’s first goal should be establishing a strong AML program. The program should include written policies and procedures, independent audits, and staff training to make sure you are compliant. Next, you should be filing SARs whenever you come across suspicious activity. The third requirement is filing CTRs for all cash transactions that are over $10,000. And finally, your company should be conducting CDD. CDD includes verifying the identity of customers and identifying the Ultimate Beneficial Owners (UBOs) of legal entities to create a transparent customer profile and help FinCEN detect suspicious activity. 

What Is the Corporate Transparency Act (CTA) and FinCEN’s Role

The Corporate Transparency Act (CTA) is a U.S. law; the law requires your company to disclose your beneficial ownership information (BOI) to FinCEN if you are amongst reporting company categories. The goal is to prevent the abuse of shell companies for crimes like money laundering and tax evasion. FinCEN’s role is to collect the information companies sent to then maintain this data to then provide secure access to law enforcement and regulators that ask for it. 

What's FinCEN’s Role in Cryptocurrency Regulation?

Virtual asset service providers (VASPs) and crypto platforms are treated as money services businesses (MSBs) according to FinCEN regulations. The classification brings with it several requirements. These firms need to register with FinCEN, implement AML measures, and perform CDD on their customers. Crypto firms should be also monitoring customers’ transactions for suspicious activity and filing SARs and CTRs when needed. FinCEN purpose for these regulations is to ensure transparency within crypto transactions. Thanks to their efforts, crypto transactions become traceable, which helps with potential investigations if there is any suspicious activity.

How Does FinCEN Collaborate Internationally?

FinCEN’s efforts are shared with other financial intelligence units globally to ensure no miscommunication occurs. As a member of the Egmont Group of Financial Intelligence Units (FIUs), FinCEN sends information and data to other FIUs worldwide. This collaboration makes investigations easier, especially for ones that involve international companies. FinCEN works closely with FATF, Interpol, the World Bank, and other regional AML bodies by sharing trends, typologies, and case information. The identification of emerging threats is, therefore, a collaborative effort from all of these regulatory bodies. 

What Are the Penalties for Failing to Comply With FinCEN Rules?

There are several severe consequences of failing to comply with FinCEN rules. If your company fails to file the required SARs and CTRs, fines of up to $100,000 per violation will be sent your way. The CTA demands that entities that fail to report BOI get penalties of $500 per day, with a maximum of $10,000, while also being subjected to criminal charges for willful non-compliance. These can lead to imprisonment if the crime is severe.

FinCEN assessed a $900,000 civil money penalty against Lake Elsinore Hotel and Casino for willful violations of the BSA and its implementing regulations.  The hotel and casino failed to file CTRs and SARs, and the recordkeeping failures of theirs lead to the fine of almost a million dollars.

Staying Compliant with FinCEN Using Sanction Scanner

Our Sanction Scanner team is there to help you comply with FinCEN regulations by supplying you with a strong AML and KYC program. Our solution provides real-time name screening to check customers and beneficial owners against sanctions, PEP lists, and adverse media. We also help your company by using automated transaction monitoring, which quickly identifies suspicious activity, unusual patterns, and high-risk activities, which may lead to financial crime. In the case of suspicious activity, our tool enables SAR and CTR filings to make sure you suffer from no delays.