Money transmitter licenses: fintech, crypto & pharma

Full transcript

0:12 Hi, I’m Max Dilendorf, founder of Dilendorf Law Firm based in New York.

0:17 If your business moves money — whether in fintech, crypto, payments, remittances, or healthcare platforms — money transmitter licensing is something you need to understand.

0:31 Since 2017, my firm has guided companies through obtaining money transmitter licenses nationwide.

0:41 One of the biggest misconceptions I see is this: Many founders believe that registering with FinCEN as a Money Services Business allows them to operate nationwide or statewide.

0:55 That is incorrect. FinCEN MSB registration is essentially a notice filing. It is completed by submitting FinCEN Form 107 through the BSA E-Filing system, and it can be done in minutes.

1:13 It is not “approved” or “denied” the way a state money transmitter license is.

1:20 You are not waiting for discretionary approval to begin activity.

1:26 But it is still a federal regulatory requirement. Filing incorrectly — or failing to file at all — can carry serious consequences. Most importantly, FinCEN registration does not authorize you to conduct money transmission in any state.

1:45 It simply notifies the federal government of your intent to operate and confirms compliance with the U.S. Bank Secrecy Act. It is a federal AML registration — not a state license.

2:00 Operating money transmission at the state level without the required license can be a felony under applicable federal and state law. This issue arises not only in fintech and crypto, but also in healthcare platforms that handle copay funds, rebates, reimbursements, or cross-border payments. But even when licensing may appear required, the analysis is not always straightforward. Many states provide statutory exemptions for certain activities — such as the Agent-of-the-payee exemption, Merchant or payment processor, Payroll processing services Determining if your business qualifies for one of these exemptions requires careful, state-by-state legal analysis. That’s why strategy comes before filing.

3:06 To qualify for state licenses, your company must maintain a legitimate physical office and have an experienced compliance officer overseeing operations.

3:19 Regulators expect a real office — not just a virtual address — because once you are licensed, you will be subject to annual audits. Examiners can come to your office and request documentation on the spot. They may ask for transaction records, AML reports, consumer complaint logs, or copies of Suspicious Activity Reports or SARs filed with FinCEN.

3:53 If your compliance program is not fully operational, that becomes immediately apparent during an audit — and can expose your company to significant fines and enforcement actions.

4:07 Obtaining licenses is complex. But maintaining them properly is often even more demanding.

4:14 Once we understand that licensing is required, companies often make another mistake — trying to apply everywhere at once. That approach is expensive, inefficient, and often unnecessary. Not every business model requires direct licensing. Some operate through sponsor banks or licensed program managers.

4:37 The first step is legal analysis and structural planning — not filing applications.

4:44 If licenses are required, you need a state-by-state strategy.

4:50 Each state has different capital requirements, surety bond thresholds, timelines, and compliance expectations. Some states are more startup-friendly and open to preliminary discussions. Others, such as New York and California, tend to be more rigorous in their review process. Licensing should align with your rollout plan, capital position, and long-term growth strategy. We get companies ready for state examinations before they apply. We then help manage the licensing process through NMLS — drafting core compliance policies, preparing financial disclosures, and responding to state comments after filing. With the right strategy from the beginning, companies can avoid costly mistakes. We help clients save tens of thousands of dollars — and in some cases hundreds of thousands — in unnecessary application, licensing, and legal expenses. That’s where experienced counsel makes the difference. If you’re launching or scaling a fintech,

6:04 crypto, payments, or pharm platform that moves money, early planning is critical.

6:11 It can mean the difference between successful growth and enforcement problems.

6:17 If you need help with your licensing strategy, contact us for a consultation.

6:22 I’m Max Dilendorf, and we help companies build compliant, scalable financial infrastructure.

A transcript of the recording, so it reads as speech rather than as prose. It explains the law in general terms and is not advice on your own situation, which turns on facts this video cannot know.