Money Transmitter
A financial service provider that moves money on behalf of users, subject to regulatory licensing requirements.
Last Updated
2026-03-19
Related Concepts
What is Money Transmitter?
A money transmitter is a legal classification for businesses that move funds between parties. In crypto, this covers exchanges and payment processors that bridge fiat and digital assets.
How does Money Transmitter work?
The business applies for licenses at state and federal level, implements KYC/AML programs, monitors transactions for suspicious activity, and reports to regulators like FinCEN.
Why does Money Transmitter matter?
It is the primary way governments ensure crypto platforms comply with financial law. Without licensing, operating as a money transmitter is illegal in most jurisdictions.
Key features of Money Transmitter
- Requires state and/or federal licensing
- Mandatory KYC and AML compliance
- Ongoing transaction monitoring
- Applies to exchanges and fiat on-ramps
Examples of Money Transmitter
Coinbase and Kraken hold dozens of money transmitter licenses across US states. A crypto startup may spend a year or more acquiring licenses before launching publicly in the US.