Bank Secrecy Act (BSA)
A foundational U.S. law requiring financial institutions, including many crypto businesses, to maintain records and file reports that help detect and prevent money laundering.
The Bank Secrecy Act is a foundational U.S. law establishing anti-money-laundering requirements for financial institutions, requiring them to maintain specific transaction records, verify customer identities, and file reports — including Suspicious Activity Reports and Currency Transaction Reports (see Kaavon's "Currency Transaction Report (CTR)" glossary definition) — intended to help regulators and law enforcement detect and investigate money laundering, terrorist financing, and other financial crimes. Many crypto exchanges and other crypto businesses that qualify as money services businesses are subject to BSA requirements in the United States.
The BSA is enforced and its specific crypto-related guidance interpreted primarily by FinCEN (see Kaavon's "FinCEN" glossary definition), which has issued specific guidance clarifying how BSA obligations apply to various categories of crypto businesses, such as exchanges, certain wallet providers, and other money transmitters. Compliance with the BSA typically underpins a crypto exchange's broader KYC and anti-money-laundering program, including identity verification, transaction monitoring, and recordkeeping requirements.
Examples
- A U.S. crypto exchange operating as a money services business is generally subject to Bank Secrecy Act requirements, including customer identity verification and transaction reporting.
- The Bank Secrecy Act's reporting requirements, including Suspicious Activity Reports and Currency Transaction Reports, form the backbone of most U.S. crypto exchanges' compliance programs.