ASK MAT – Is the U.S. Financial Crime Enforcement Loosening the Reins or Tightening the Noose?

ASK MAT – Is the U.S. Financial Crime Enforcement Loosening the Reins or Tightening the Noose?

MAT SAYS

• At a time when FATF is seeking countries to demonstrate effectiveness in reducing financial crime, there is an argument that U.S. Financial Crime Enforcement is being rolled back.
• As a non-US individual, I can only look at this matter from afar, but when scratching the surface of 2025/26 financial crime enforcement, I see [see my sources at the end of this blog] a country doing more than most.
• The following is my take on the current state of U.S. Financial Crime Enforcement and whether it is Loosening the Reins or Tightening the Noose?

EXECUTIVE SUMMARY

• Amid perceptions of regulatory rollback under the second Trump administration, the U.S. approach to anti-money laundering (AML), counter-terrorism financing (CTF), and counter-proliferation financing (CPF) appears to remain robust and targeted.
• While efforts to reduce burdens, such as postponing AML rules for investment advisers to 2028, exempting domestic firms from beneficial ownership reporting, and centralising enforcement under the Financial Crimes Enforcement Network (FinCEN), aim to promote efficiency and risk-based compliance, penalties do not appear to be declining.
• In 2025, fines exceeded $1.1 billion, focusing on high-risk sectors like cryptocurrency and sanctions evasion, with agencies like FinCEN, OFAC, and BIS issuing record assessments.
• This nuanced strategy refines regulations for better outcomes against evolving threats like cybercrime and drug trafficking, without compromising aggressive prosecution of violations.
• This is not to say there is Evidence of loosening or Burden-Reduction Efforts

EVIDENCE OF LOOSENING OR BURDEN-REDUCTION EFFORTS

• Several developments indicate a push to "right-size" regulations, delay expansions, and prioritise risk-based approaches over technical compliance, aligning with the administration's emphasis on combating overcriminalization and promoting efficiency:
• FinCEN postponed the effective date of its AML/CTF rule for investment advisers from January 1, 2026, to January 1, 2028, to reassess its scope and reduce compliance costs for the sector while reviewing business models and risks. This rule would have extended Bank Secrecy Act (BSA) obligations, including suspicious activity reporting, to registered and exempt reporting advisers.
• FinCEN issued an interim final rule in early 2025 exempting domestic U.S. companies from the Corporate Transparency Act's beneficial ownership reporting requirements, while maintaining them for foreign-owned entities to focus on higher-risk international structures. This reduces administrative burdens for U.S. entities.
• The U.S. Treasury proposed centralising AML enforcement under FinCEN, potentially allowing it to veto penalties from other regulators for "mere technical violations" and overhaul the system to catch illicit activities more efficiently. Federal bank regulators also announced they would no longer enforce based on "reputational risk" alone.
• A June 2024 Notice of Proposed Rulemaking (NPRM) from FinCEN, expected to be finalised in 2026, aims to modernise AML/CTF programs by explicitly requiring them to be "effective, risk-based, and reasonably designed," allowing institutions to reallocate resources from low-value to high-value activities. This includes incorporating government AML/CTF priorities (e.g., corruption, cybercrime, terrorism financing) into risk assessments.
• The administration issued guidance limiting enforcement in digital assets to wilful violations or those causing harm, avoiding "regulation by enforcement" in non-criminal cases. Broader efforts include risk-focused examinations and reforms to BSA reporting to lessen burdens on community banks.
• These changes reflect a policy shift toward flexibility, innovation, and outcomes-focused approaches, potentially easing burdens for lower-risk entities. However, enforcement has not waned for those who are caught out

EVIDENCE OF CONTINUED OR HEIGHTENED ENFORCEMENT

• Despite these adjustments, enforcement has not waned; penalties remain substantial, and actions target serious violations, especially in high-risk areas.
• Total AML/CTF penalties in 2025 exceeded $1.1 billion, primarily against crypto exchanges ($927.5 million), money transmitters, securities firms, and casinos.
• While no major bank penalty was issued in 2025 (a first in over 20 years, possibly due to improved compliance), enforcement intensified elsewhere:
• FinCEN's actions in 2025 included heightened scrutiny on crypto, with penalties like the DOJ's $500+ million fine against OKX for AML failures.
• Office of Foreign Assets Control (OFAC) penalties increased sharply in 2025, with a focus on sanctions evasion, including multiple eight-figure settlements. Enforcement against non-bank financial institutions, gatekeepers (e.g., investment advisors, accountants), and sectors like private equity and real estate is expected to intensify in 2026.
• The Bureau of Industry and Security (BIS) total fines over the 12 months have hit $4,559,525.00
• Global AML fines rose 417% in H1 2025 vs H1 2024, with U.S. actions contributing significantly, though North American fines fell 58% overall in 2025 due to regional shifts and priorities.

GLOBAL FINES VIS-À-VIS THE USA

• Global AML (anti-money laundering) fines indeed rose by 417% in the first half (H1) of 2025 compared to H1 2024, increasing from approximately $238.6 million to $1.23 billion across 139 penalties worldwide.
• This surge was driven primarily by heightened regulatory scrutiny on the cryptocurrency sector and sanctions violations, with fines for sanctions breaches jumping from $3.7 million in H1 2024 to $228.8 million in H1 2025.
• Regarding the U.S. contribution, North American regulators (predominantly U.S. authorities) issued the largest share of these penalties,
• totalling over $1.06 billion in H1 2025, a 565% increase from H1 2024.
• This accounted for roughly 86% of the global total for the period, with the U.S. contributing the majority of the North American figure.
• For context,
• Europe, the Middle East, and Africa. [EMEA]  regulators issued $168.2 million (up 147% year-over-year),
• Asia-Pacific.[APAC] issued just $3.4 million (down significantly).
• Here's a regional breakdown of H1 2025 AML fines for clarity:

• Key U.S. actions driving this included major penalties from the Department of Justice (DOJ):
• Cryptocurrency exchange OKX was fined over $504 million in February 2025 for failing to maintain an effective AML program.
• Cryptocurrency exchange BitMEX was fined over $100 million for similar AML failings.
• These two penalties alone represent more than half of the North American total, underscoring the significant U.S. role in the global increase.

THE BOTTOM LINE

• As a non-US commentator, it seems to me the U.S. is not broadly reducing enforcement or loosening regulations but is instead refining them to be more targeted and efficient, while maintaining aggressive penalties for violations.
• This risk-based shift, emphasised in the Anti-Money Laundering Act of 2020 and ongoing reforms, which seems to be aligned with FATF, aims to enhance effectiveness against evolving threats like cybercrime, sanctions evasion, and drug trafficking, without unnecessary burdens on compliant entities.
• Daily large fines reflect sustained vigour in prosecuting wilful or systemic failures, particularly in crypto and border-related activities, even as some rules are delayed or narrowed.
• Businesses should monitor for further 2026 changes, such as finalised NPRMs, and ensure programs align with updated priorities to avoid scrutiny.

CLOSE

• This blog is based on my research [see 18 sources below] and my maintenance of the Comsure news website, which seems to be a regulatory post on US enforcement matters.
• In writing this, I am cautious because I’m not on the ground in the US, and therefore, what is seen from afar may not be the lived experience of those operating in the US
• I would happily hear from others and their take on this issue, and if it's possible, can we avoid the politics

WRITTEN BY

• Mathew Beale - Chartered FCSI
• Principal & Director - Comsure Compliance Limited, Comsure Technology Limited, Comsure Mauritius (the "Comsure Group of Companies")
• mathewbeale@comsuregroup.com
• comsuregroup.com
• T (Jersey) +44 1534 733-588 /+44 7797 747-490

References

[1] 2025 Year-End Developments in Anti-Money Laundering - https://www.gibsondunn.com/2025-year-end-developments-in-anti-money-laundering

[2] The biggest AML fines in 2025 - https://complyadvantage.com/insights/the-biggest-aml-fines-in-2025

[3] AML/CFT and Sanctions Enforcement Actions in 2025 - https://finintegrity.org/aml-cft-and-sanctions-enforcement-actions-in-2025

[4] Global financial regulatory penalties fall by 18% in 2025 as enforcement shifts from the US to EMEA and APAC - https://resources.fenergo.com/newsroom/global-financial-regulatory-penalties-fall-by-18-in-2025-as-enforcement-shifts-from-us-to-emea-and-apac

[5] Regulatory Penalties Dropped in '25, Led by Sharp US Decline - https://www.corporatecomplianceinsights.com/news-roundup-january-15-2026

[6] Treasury Announces Postponement and Reopening of Investment Adviser Rule - https://home.treasury.gov/news/press-releases/sb0201

[7] AML & Compliance Developments: What's New and What's Next in 2026 - CSI - https://www.csiweb.com/what-to-know/content-hub/blog/aml-compliance-outlook-2026

[8] Anti Money Laundering Laws and Regulations Report 2025-2026 USA - https://iclg.com/practice-areas/anti-money-laundering-laws-and-regulations/usa

[9] BREAKING: US Treasury proposes overruling bank regulators on AML penalties - https://www.amlintelligence.com/2025/12/breaking-us-treasury-proposes-overruling-bank-regulators-on-aml-penalties

[10] AML Trends & Technology 2025: Turning Insights into Action - https://verafin.com/2026/01/aml-trends-technology-2025-turning-insights-into-action

[11] Enforcement Actions Roundup: October 2025 - https://www.ncontracts.com/nsight-blog/enforcement-actions-roundup-october-2025

[12] USA AML Compliance in 2025 – The Key Regulations and Trends - https://namescan.io/insights/u-s-aml-compliance-in-2025

[13] U.S. sees steep drop in penalties in 2025, while fines elsewhere increase - https://www.complianceweek.com/reports/us-sees-steep-drop-in-penalties-in-2025-while-fines-elsewhere-increase/36450.article

[14] Q4 2025 compliance updates for financial institutions | Our Insights - https://www.plantemoran.com/explore-our-thinking/insight/2026/01/q4-2025-compliance-updates-for-financial-institutions

[15] Surging Regulatory Fines: How Risk Leaders Can Rise to the Challenge - https://www.garp.org/risk-intelligence/culture-governance/surging-regulatory-fines-251107

[16] The 2025 AML Crackdown: U.S. Regulators Are Raising the Stakes - Alessa - https://alessa.com/blog/the-2025-aml-crackdown

[17] 2025 Trends in AML and Financial Crime Compliance As We Enter Q4 - https://www.silenteight.com/blog/2025-trends-in-aml-and-financial-crime-compliance-as-we-enter-q4

[18] Crypto compliance in 2026: AML, sanctions and what's ahead - https://www.grantthornton.com/insights/articles/banking/2026/crypto-compliance-in-2026