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Remote VASP serving residents in United States

Foreign-incorporated entity that offers exchange, custody, or transfer services to residents of a jurisdiction without establishing a local entity or office.

Not permitted AI-Generated · Reviewed

Remote VASP is not permitted in United States.

Verdict Details

Permitted
no
Local entity required
Yes
Licensing burden
High
Last updated
2026-05-28

AML Obligations

  • FinCEN MSB registration required if 'doing business wholly or in substantial part within the United States' — interpreted broadly to include serving US residents from abroad
  • Travel Rule applies to all transmittals at or above $3,000 (Bank Secrecy Act)
  • State-by-state money transmitter licensing required in addition to federal MSB — no federal preemption
  • FATF Recommendation 16 / Travel Rule equivalence enforced via FinCEN guidance

Key Restrictions

  • DOJ has criminally prosecuted offshore exchanges (BitMEX 2020, Binance.com 2023) for serving US persons without registration
  • OFAC sanctions exposure applies regardless of operator location — US persons (or any USD-denominated transaction) cannot be served if on the SDN list
  • SEC's broad interpretation of securities law (post-SEC v. Coinbase 2023) extends to foreign platforms offering listed assets to US persons
  • Geofencing is the de-facto operating posture: most foreign exchanges block US IPs and require non-US KYC declarations

Key Risks

  • Highest enforcement-risk jurisdiction globally — DOJ, FinCEN, SEC, CFTC, OFAC all have demonstrated willingness to act extraterritorially
  • Civil and criminal penalties include forfeiture of crypto funds, personal liability for officers, and Bank Secrecy Act conspiracy charges
  • Even passive presence (US-residing developers, US server colocation, US-domiciled customers via VPN) has been used as the jurisdictional hook
  • 'Wind-down' settlements typically require operator to exit the US market, pay deferred-prosecution penalties, and submit to monitoring

Evidence

This verdict synthesizes the following facts. Each fact links to its primary source(s).

licensing 90% confidence

FinCEN — Treasury bureau (31 U.S.C. 310) that administers the Bank Secrecy Act: MSB registration on Form 107 within 180 days of establishment and every two years (31 CFR 1022.380), and the funds-transfer recordkeeping and travel rule for transmittals of $3,000 or more (31 CFR 1010.410(e)-(f)).

[primary] 31 U.S.C. 310 — Financial Crimes Enforcement Network [primary] FinCEN — Money Services Business (MSB) Registration [primary] 31 CFR 1010.410 — Records to be made and retained by financial institutions (travel rule)
licensing 90% confidence

SEC — regulates crypto assets that are securities and transactions in them, including broker-dealer and exchange registration under the Exchange Act. Its 17 March 2026 interpretation (Rel. 33-11412, 91 FR 13714) sets a token taxonomy of digital commodities, digital collectibles, digital tools, stablecoins and digital securities, and applies the Howey test to determine when a non-security crypto asset is subject to an investment contract.

[primary] Rel. 33-11412, 91 FR 13714 (23 Mar 2026) — full text [primary] SEC Press Release 2026-30: SEC Clarifies Application of Federal Securities Laws to Crypto Assets [primary] 15 U.S.C. 78o — Securities Exchange Act of 1934 §15 (broker-dealer registration)
licensing 90% confidence

OFAC — administers U.S. economic sanctions, which apply to virtual currency transactions; on 15 October 2021 it published 'Sanctions Compliance Guidance for the Virtual Currency Industry'.

[primary] OFAC Recent Actions 15 Oct 2021: Sanctions Compliance Guidance for the Virtual Currency Industry
licensing 85% confidence

DOJ — prosecutes federal crimes involving crypto assets, including money laundering (18 U.S.C. 1956) and operating an unlicensed money transmitting business (18 U.S.C. 1960), as well as fraud and sanctions-evasion offences.

[primary] 18 U.S.C. 1956 — Laundering of monetary instruments [primary] 18 U.S.C. 1960 — Prohibition of unlicensed money transmitting businesses
licensing 85% confidence

Bank Secrecy Act (Public Law 91-508, 1970; codified at 31 U.S.C. 5311 et seq.) is the federal AML/CFT statute. It requires reports and records useful in criminal, tax and regulatory investigations and requires money transmitting businesses to register with Treasury (31 U.S.C. 5330), implemented by FinCEN Form 107 within 180 days of establishment and renewal every two years (31 CFR 1022.380).

[primary] 31 U.S.C. 5311 — Bank Secrecy Act declaration of purpose [primary] 31 U.S.C. 5330 — Registration of money transmitting businesses [primary] FinCEN — Money Services Business (MSB) Registration

Verdict Attribution

Source:
AI-Generated · Reviewed
Curated by:
scott@savyadvisors.com
Last updated:
2026-05-28
Confidence:
high

This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.

US is effectively closed to remote VASPs without registration. Operating model used by Binance.com (2017-2023) and BitMEX (2014-2020) resulted in DOJ criminal prosecutions. Pending counsel review.

Questions this verdict aims to answer

  • May a non-resident provider serve residents from abroad?
  • Does cross-border service trigger licensing, registration, or AML obligations?
  • What enforcement risk exists for unlicensed remote operators?