Regulatory Alerts2014-04-29
Application of Money Services Business Regulations to a Company that Offers Escrow Services to a Buyer and Seller in a Given Internet Sale of Goods or Services
The Financial Crimes Enforcement Network issued this administrative ruling to determine that a company providing escrow services for internet sales is not a money services business under the Bank Secrecy Act. FinCEN concluded that the acceptance and transmission of funds are necessary and integral to the underlying transaction management service rather than constituting a separate money transmission service. Consequently, the company is exempt from registering as a money transmitter because its fund handling is limited to holding deposits until specified conditions of the sale are met.
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