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President Trump’s May 19, 2026 executive order, Restoring Integrity to America’s Financial System, directs Treasury, FinCEN, the CFPB, and the federal banking agencies to reassess how financial institutions identify and manage risks associated with non-work authorized populations and related cross border financial activity. The order reflects a significant shift in federal expectations across BSA/AML compliance, customer identification, and consumer credit underwriting. It also establishes short deadlines that will drive rapid regulatory and supervisory developments through the remainder of 2026.

The order frames these issues as national security and public safety concerns. It cites analyses linking low dollar cross border transfers to terrorist financing, narcotics trafficking, and human trafficking. It highlights Chinese money laundering networks that allegedly used U.S. accounts held by foreign passport holders to launder more than $312 billion for criminal organizations. It also identifies fentanyl related financial activity tied to Mexico based cartels as a priority area for regulatory attention.

At the same time, the order directs regulators to treat lending to non-work authorized individuals as a structural safety and soundness concern. It characterizes potential deportation and loss of wages as creating a fundamental ability to repay deficiency. This framing signals a broader policy shift that will affect both consumer credit markets and fair lending supervision.

Key Directives and Deadlines

The order requires several regulatory actions on compressed timelines.

Treasury Advisory (60 Days)

Within 60 days, Treasury must issue an Advisory describing red flags and typologies associated with six categories of suspicious activity:

  • Payroll tax evasion by employers or labor brokers
  • Use of foreign identity documents or nominee structures to conceal beneficial ownership or payroll disbursements
  • Unregistered MSBs and third party processors used for off the books wage payments intended to bypass BSA reporting thresholds
  • Structuring and micro structuring correlated with payroll cycles
  • Labor trafficking indicators where illicit proceeds are commingled with legitimate revenue
  • Use of ITINs to obtain credit or open accounts without verified lawful immigration status

Although the Advisory will not be binding, examiners routinely treat Treasury Advisories as articulations of expected practice. Institutions should anticipate that the Advisory will influence SAR filing expectations and monitoring scenarios well before any rulemaking is complete.

BSA Due Diligence Regulations (90 Days)

Within 90 days, Treasury must propose amendments to strengthen risk-based customer due diligence. The proposal must ensure institutions collect and verify sufficient identity information to assess illicit finance, sanctions evasion, and fraud risks. It must also preserve institutional authority to obtain additional information, including information relevant to immigration status and employment authorization, when other risk indicators warrant it.

Customer Identification Program Requirements (180 Days)

Within 180 days, Treasury and the federal functional financial regulators must consider changes to CIP regulations, with specific attention to risks associated with foreign consular identification cards. Institutions that rely on these documents for account opening should prepare for potential verification or documentation changes.

Credit Risk Guidance (60 Days)

Within 60 days, the CFPB must consider clarifying that potential deportation and loss of wages may adversely affect a non-work authorized borrower’s ability to repay under Regulation Z. Each federal functional financial regulator must also issue guidance on managing credit risks associated with non-work authorized populations. This directive raises complex questions about how lenders may incorporate immigration related risk factors while managing fair lending obligations.

Practical Implications for Financial Institutions

BSA/AML Programs

Institutions should begin reviewing transaction monitoring scenarios and SAR filing practices against the six categories of suspicious activity identified in the order. The forthcoming Treasury Advisory will likely establish new expectations for how institutions identify and report activity involving non-work authorized populations and their employers. Institutions should evaluate whether existing monitoring rules capture payroll related structuring, funnel account activity, and patterns associated with unregistered MSBs or third-party processors.

Customer Identification and Due Diligence

The order’s focus on consular identification cards and ITINs signals heightened scrutiny of identification documents commonly used by noncitizens. Institutions that accept these documents should assess whether existing CIP and CDD procedures address the risk indicators identified and whether additional verification steps may become necessary. Potential enhancements include supplemental non documentary verification, additional beneficial ownership inquiries, and review of employment authorization where risk indicators are present.

Credit Underwriting

Lenders offering consumer credit, particularly mortgage, auto, and credit card products, should evaluate whether underwriting models and ability to repay analyses account for the immigration related risk factors highlighted in the order. The CFPB’s forthcoming guidance will determine how lenders may incorporate these factors while managing fair lending obligations. Institutions should prepare for potential adjustments to income stability assessments, treatment of ITIN based applications, and portfolio level risk reviews.

Employer Related Risks

The order’s treatment of employer immigration law violations as a financial system vulnerability is notable. Institutions that bank employers in industries with high concentrations of non work authorized labor should anticipate increased scrutiny of payroll irregularities, mismatched tax identification numbers, and unusual payment patterns. These considerations may affect risk rating methodologies and periodic reviews for certain commercial customers.

Fair Lending Considerations

Institutions should monitor how the CFPB and prudential regulators reconcile the order’s directives with existing fair lending requirements under the Equal Credit Opportunity Act and the Fair Housing Act. The intersection of immigration status considerations and prohibited basis discrimination will require careful navigation, particularly if regulators expect lenders to incorporate deportation risk into underwriting.

Looking Ahead

The compressed timelines in the executive order mean that financial institutions will face a rapidly evolving regulatory environment over the next two to six months. Institutions should begin assessing how their existing BSA/AML, CIP, CDD, and credit underwriting programs align with the issues highlighted in the order and prepare for increased supervisory attention as agencies issue Advisories, proposed rules, and credit risk guidance.

We will continue to monitor developments as agencies complete their reviews and begin implementing the Order. If you would like to remain updated on these issues, please click here to subscribe to Money Laundering Watch. And please click here to find out about Ballard Spahr’s Anti-Money Laundering Team.

President Trump issued Executive Order 14405 (the “Order”) on May 19, 2026 titled Integrating Financial Technology Innovation into Regulatory Frameworks. The Order directs federal financial regulators to review and update regulations, guidance, and supervisory practices to support financial technology innovation and reduce barriers to entry for non‑bank fintech firms. It follows earlier actions establishing federal digital asset policy and a Strategic Bitcoin Reserve.

Stated Policy Objectives

The Order states that it is the policy of the United States to streamline regulatory processes, reduce unnecessary barriers to entry, and promote collaboration among fintech firms, federally regulated financial institutions, and federal financial regulators. It describes fintech firms as contributors to expanded access to financial services and economic opportunity. It also asserts that federal regulations should be updated to support the integration of digital assets and emerging technologies into traditional financial services and payment systems. The Order highlights concerns about fragmented or outdated regulatory requirements that may favor incumbent institutions.

Definition of “Fintech Firm”

The Order defines a fintech firm as any non‑bank company that uses or develops technology to offer or support financial products or services. The definition is broad and includes payment processing, lending, deposit‑taking, derivatives, investment management, brokerage services, underwriting, capital markets activities, custodial and fiduciary services, digital banking, digital asset services, securities and commodities activities, and blockchain‑based services. The Order incorporates by reference the financial activities listed in section 4(k)(4) of the Bank Holding Company Act.

Regulatory Review and Streamlining

Section 3 directs each federal financial regulator, including the CFPB, SEC, NCUA, CFTC, FDIC, and OCC, to conduct a review within 90 days of existing regulations, guidance, supervisory practices, and application processes. The review must identify items that could be updated to facilitate innovation and competition, including those that impede partnerships between fintech firms and federally regulated institutions. Agencies must also identify opportunities to streamline application processes for fintech firms seeking bank or credit union charters, deposit or share insurance, or other federal licenses and registrations.

The Order instructs agencies to balance innovation with safety and soundness, consumer and investor protection, market integrity, financial stability, and oversight. Within 180 days, each regulator is directed to take steps to encourage innovation based on the review, in consultation with the Assistant to the President for Economic Policy.

Access to Federal Reserve Payment Services

Section 4 requests that the Board of Governors of the Federal Reserve System conduct a comprehensive evaluation of the legal, regulatory, and policy framework governing access to Reserve Bank payment accounts and payment services by uninsured depository institutions and non‑bank financial companies, including firms engaged in digital assets and other novel activities. The Federal Reserve is asked to report within 120 days on:

  • the legal authority to extend direct access to such firms
  • options for expanding access subject to risk management requirements
  • legal impediments to direct access and potential legislative or regulatory solutions
  • whether individual Reserve Banks may act independently in granting or denying access and what policies should ensure consistent evaluation of applications

If the Federal Reserve determines that existing law permits expanded access, the Order requests that it establish transparent application procedures and make determinations on complete applications within 90 days.

Broader Context

The White House Fact Sheet describes the Order as part of a broader effort to position the United States as a global leader in financial innovation. It asserts that current rules governing access to payment services and third‑party risk management requirements may favor incumbents and that many financial regulations were designed for a brick‑and‑mortar environment. The Administration frames the Order as an attempt to modernize regulatory frameworks to reflect digital‑age financial services.

What This Means for Financial Institutions

Anticipated Regulatory Changes

The 90‑day review period means that by mid‑August 2026, each named regulator must complete its assessment. The 180‑day deadline for taking steps to encourage innovation extends into mid‑November 2026. Institutions should expect proposed rulemakings, updated guidance, or revised supervisory expectations to emerge on that timeline, particularly in areas involving bank‑fintech partnerships and chartering processes.

Third‑Party Risk Management and Bank‑Fintech Partnerships

The Order’s focus on regulations that impede partnerships suggests that existing interagency guidance on third‑party risk management, including the 2023 joint guidance issued by the OCC, FDIC, and Federal Reserve, may be revisited. Institutions with existing or planned fintech partnerships should anticipate potential adjustments to due diligence and oversight expectations. Current requirements remain in effect unless formally amended.

BSA/AML Considerations

Although the Order does not directly address Bank Secrecy Act or anti‑money laundering obligations, the potential expansion of Federal Reserve payment system access to non‑bank fintechs raises questions about the applicable AML/CFT framework for new direct participants. If non‑bank firms gain direct access, regulators will need to clarify whether and how BSA requirements apply. Institutions that currently serve as intermediaries for fintech payment flows should consider how their obligations may shift if those flows move to direct access models.

Federal Reserve Payment System Access

The Federal Reserve’s 120‑day report, expected by mid‑September 2026, will be a key milestone. The evaluation of whether individual Reserve Banks may act independently in granting access, and the emphasis on consistent evaluation standards, indicates concern about the current decentralized approach. Institutions that rely on privileged access to the Federal Reserve payment system as a competitive advantage should monitor this development closely.

Open Questions

Several issues remain unresolved. The Order does not specify what steps regulators must take after completing their reviews, leaving significant discretion to agency leadership. The Order states that it does not create enforceable rights and that implementation is subject to available appropriations. Any expansion of Federal Reserve access to non‑bank entities may require new legislation or a novel interpretation of existing authority under the Federal Reserve Act. Congressional engagement on these issues remains uncertain.

Conclusion

The Executive Order signals a significant policy direction for fintech regulation and the relationship between traditional financial institutions and non‑bank technology firms. Although the Order is primarily directive, the deadlines for regulatory review and Federal Reserve reporting create concrete milestones that will shape the regulatory landscape in the coming months. Financial institutions should evaluate how potential changes to third‑party risk management expectations, chartering processes, and payment system access may affect their operations and partnerships.

We will continue to monitor developments as agencies complete their reviews and begin implementing the Order. If you would like to remain updated on these issues, please click here to subscribe to Money Laundering Watch. And please click here to find out about Ballard Spahr’s Anti-Money Laundering Team.

President Biden has signed an Executive Order entitled “Ensuring Responsible Innovation in Digital Assets.”  The press release regarding the Order is here.

According to the press release, the Order outlines “the first ever, whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology. The Order lays out a national policy for digital assets across six key priorities: consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.”  Not surprisingly, the section of the Order pertaining to illicit finance focuses on AML concerns, and refers to issues on which we have blogged repeatedly, including the use of digital assets to further ransomware schemes and the global patchwork quilt of crypto-related AML regulation.

The Order does not make any substantive conclusions.  Rather, it sets forth requirements for various government agencies to coordinate and submit reports and recommendations regarding many different issues.  We set forth below the bulk of the press release, which nicely summarizes the Order, and highlight in bold the six “key priorities.” Continue Reading President Biden Issues Executive Order on Digital Assets and “Whole-of-Government Approach” to Risks and Benefits

On October 9, 2025, the Financial Crimes Enforcement Network (“FinCEN”) issued a renewal of its Geographic Targeting Order (“GTOs”), which require U.S. title insurance companies, including their subsidiaries and agents, to collect, retain, and report specified information regarding certain non-financed residential real estate transactions involving legal entities. The new GTO is effective from October 10, 2025 through February 28, 2026.

Access the new GTO here.  Read FinCEN’s press release here.  Read FinCENs FAQs about the GTOs here.  This is a topic on which we previously have blogged extensively.

Context and Regulatory Background

The renewal of the GTOs follows FinCEN’s September 30, 2025 announcement postponing implementation of its forthcoming Anti-Money Laundering Regulations for Residential Real Estate Transfers Rule (“RRE Rule”) until March 1, 2026. During this interim period, FinCEN states that the GTOs are intended to maintain transparency in residential real estate markets considered at higher risk for misuse by illicit actors. According to FinCEN’s accompanying press release, these orders continue to provide data on property purchases by persons who may be involved in various unlawful activities.

Scope of Coverage

There are no changes in geographic or monetary thresholds compared with previous orders. Covered transactions must meet all of the following criteria:

  • The property is located within designated metropolitan areas or counties that include locations such as Los Angeles County, Miami-Dade County, Cook County, King County and Seattle, New York City boroughs, and others.
  • The purchase price meets or exceeds $300,000 in most covered jurisdictions; Baltimore City and County retains a lower threshold at $50,000.
  • The buyer is a “legal entity” defined as a corporation, limited liability company, partnership or similar business structure not listed on an SEC-regulated exchange.
  • The transaction does not involve external financing from regulated financial institutions subject to Bank Secrecy Act (“BSA”) anti-money laundering obligations.
  • Payment is made using currency or cash equivalents, including checks, money orders, wire transfers and funds transfers or virtual currency.

Reporting Requirements

Title insurance companies handling covered transactions must file a Currency Transaction Report with FinCEN within thirty days after closing. Required data includes:

  • Identity details for both:
    • The individual primarily responsible for representing the purchasing entity;
    • Each beneficial owner holding at least twenty-five percent equity interest; and
    • Government-issued identification documents must be collected/described.
  • Confirmation that buyer qualifies under relevant “legal entity” definitions;
  • Property address(es);
  • Date(s) of closing;
  • Total purchase price(s);
  • Method(s) used for payment; and
  • Reporting party details, including notation “REGTO1025” indicating this specific GTO filing.

When multiple properties are included in one transaction, both total purchase price and per-property addresses and prices must be reported individually.

Record Retention & Compliance

The Order requires retention of all relevant records, including identity documents collected, for five years from expiration date. They must be accessible promptly upon request by regulators such as FinCEN.

Responsibility for compliance extends throughout each covered organization to officers, directors employees and agents alike; covered businesses are required to notify relevant personnel including executive management about these obligations. Noncompliance may result in civil or criminal penalties regardless of intent.

Key Definitions

Some important definitions under this Order include: 

  • Beneficial Owner: Any individual directly or indirectly owning twenty-five percent or more equity interests in a purchasing legal entity; and
  • Legal Entity: Includes corporations, limited liability companies, and partnerships, formed domestically or abroad; excludes those publicly listed with Securities Exchange Commission regulation.

No Modification to Broader BSA Obligations

This GTO supplements, but does not modify, other existing responsibilities imposed by the BSA.

As the real estate industry awaits broader anti-money laundering regulations, compliance with FinCEN’s renewed GTOs remains essential for title insurance companies and their agents. By continuing to collect and report detailed transaction data on non-financed purchases by legal entities, FinCEN proports that these measures aim to strengthen market transparency and deter criminal abuse of residential real estate. Staying informed on these developments will be critical as regulatory expectations evolve ahead of the RRE Rule’s full implementation in 2026.

If you would like to remain updated on these issues, please click here to subscribe to Money Laundering Watch. Please click here to find out about Ballard Spahr’s Anti-Money Laundering Team. 

U.N. Report Focus on Improving Accountability, Transparency and Good Governance

On March 2, 2020 the United Nations released a Report on Financial Integrity For Sustainable Development (the “Report”). Although the Report is lengthy and wide-ranging, we will focus here on the portions of the Report which target the humanitarian toll of Illicit Financial Flows (IFFs) from money laundering, tax abuse, cross-border corruption, and transnational financial crime – all of which can drain resources from sustainable development, worsen inequality, fuel instability, undermine governance, and damage public trust.   We also will focus on the portions of the Report which make recommendations designed to expand anti-money laundering (“AML”) compliance.

First, the Report makes evidence-based recommendations focused on accountability, designed to close international enforcement and compliance gaps. Those recommendations include: (i) all countries enacting legislation providing for the widest range of legal tools to pursue cross-border financial crime; (ii) the international community developing an agreed-upon international standard for settlement of cross-border corruption cases, and (iii) businesses holding accountable all executives, staff, and board members who foster or tolerate IFFs in the name of the business.

Second, the Report makes other recommendations on several AML-related issues on which we have blogged: (i) each country creating a central registry of beneficial ownership information for legal entities; (ii) creating global standards for professionals, including lawyers, accountants, bankers and real estate agents; (iii) improving protections for human rights defenders, anti-corruption advocates, investigative journalists and whistleblowers; and (iv) promoting the exchange of information internationally among law enforcement officers and other authorities.

The Report clearly envisions that corporations can and should play a pivotal role in contributing resources in the fight against corruption, money laundering and cross-border financial crime. To start, Boards and management, particularly those of financial and professional service institutions, must engage in oversight to ensure that compensation, benefits, and employment itself are contingent upon financial integrity. Investors also should embrace financial integrity for sustainable development and be clear with the companies in which they invest that they expect effective anti-corruption policies and regulatory compliance. Integrity will be cultivated when organizational leadership hold board members, executives, and staff accountable if they foster or tolerate IFFs in the name of the business. Moreover, the Report observes that governments can foster financial integrity by imposing liability for failing to prevent bribery or corruption. Continue Reading United Nations Targets Corruption and Illicit Cross-Border Finance

Incorporating in the Seychelles but Allegedly Operating in the U.S. Spells Trouble for Company and its Founders

Anse Source d’Argent, La Digue Island, Seychelles

The Bitcoin Mercantile Exchange, or BitMEX, is a large and well-known online trading platform dealing in futures contracts and other derivative products tied to the value of cryptocurrencies. Recently, the Commodity Futures Trading Commission (“CFTC”) filed a civil complaint against the holding companies that own and operate BitMEX, incorporated in the Seychelles, and three individual co-founders and co-owners of BitMEX for allegedly failing to register with the CFTC and violating various laws and regulations under the Commodity Exchange Act (“CEA”). The 40-page complaint alleges in part that the defendants operated BitMEX as an unregistered future commission merchant and seeks monetary penalties and injunction relief.

In a one-two punch, the U.S. Attorney’s Office for the Southern District of New York on the same day unsealed an indictment against the same three individuals, as well as a fourth individual who allegedly served various roles at BitMEX, including as its Head of Business Development. The indictment charges the defendants with violating, and conspiring to violate, the requirement under 31 U.S.C. § 5318(h) of the Bank Secrecy Act (“BSA”) that certain financial institutions – including futures commissions merchants – maintain an adequate anti-money laundering (“AML”) program.

Both documents are detailed and unusual. This appears to be only the second contested civil complaint filed by the CFTC based on the failure to register under the CEA in connection with the alleged illegal trading of digital assets (other than those for which settlement orders were entered into with the CFTC). The first such complaint was filed only a week prior against Latino Group Limited (doing business as PaxForex), but the BitMEX complaint has garnered more attention in light of BitMEX’s reputation and size. Most of the CFTC’s prior actions against digital asset companies involved claims for fraud or misrepresentation in the solicitation of customers. This complaint, against a relatively mature and large digital asset company, demonstrates that the CFTC continues to actively pursue trading platforms and exchanges that solicit orders in the United States without proper registration. In addition to failing to register, the complaint alleges that the defendants failed to comply with the regulation under the CEA, 17 C.F.R. § 42.2, which incorporates BSA requirements such as an adequate AML program.

The indictment is unusual because it charges a rare criminal violation of Section 5318(h) – the general requirement to maintain an adequate AML program. Although indictments against defendants involved in digital assets are increasingly common, this also appears to be the first indictment combining allegations involving the BSA, digital assets, and alleged futures commissions merchants.

The complaint and the indictment share the common theme that the defendants attempted to avoid U.S. law and regulation by incorporating in the Seychelles but nonetheless operating in the United States. The opening lines of the CFTC complaint declare that “BitMEX touts itself as the world’s largest cryptocurrency derivatives platform in the world with billions of dollars’ worth of trading each day. Much of this trading volume and its profitability derives from its extensive access to United States markets and customers.” Meanwhile, the indictment alleges that defendant Arthur Hayes – a Fortune “40 Under 40” listee – “bragged . . . that the Seychelles was a more friendly jurisdiction for BitMEX because it cost less to bribe Seychellois authorities – just “a coconut” – than it would cost to bribe regulators in the United States and elsewhere.” Continue Reading CFTC and DOJ Charge BitMEX and Executives With Illegally Trading in Digital Assets and Ignoring BSA/AML Requirements

On June 30, 2026, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued an alert (the “Alert”), alongside a press release, outlining efforts to combat fiscal fuel theft (known in Mexico as “huachicol fiscal”) along the U.S.-Mexico border.  In simplest terms, fiscal fuel theft occurs when fuel is smuggled from the U.S. to Mexico to evade Mexico’s import tax.

FinCEN’s action is part of U.S. law enforcement’s broader effort to curtail money laundering activities by Mexico-based cartels,” including the Jalisco New Generation Cartel (CJNG), the Sinaloa Cartel, and the Gulf Cartel— a subject we have previously covered. The Alert supplements FinCEN’s May 2025 alert on the topic and it provides updates in methodologies used in the operation and on new sanctions imposed by the Treasury’s Office of Foreign Assets Control (“OFAC”).  FinCEN’s alerts describe a scheme to bypass Mexican energy regulations, evade taxes, and undercut the fuel market, while relying on U.S. financial institutions to process transactions. In response, U.S. financial institutions operating in oil and gas markets along the southern border should remain vigilant in their due diligence and their reporting obligations.

Background: How Cartels Smuggle and Commercialize U.S. Fuel in Mexico

Mexico’s regulatory and economic programs have led to an expensive and concentrated market for fuel products. Cartels are taking advantage of rising costs by smuggling fuel across the southern border to evade Mexican import taxes while using the excess profits to advance their enterprises.

While Mexico produces oil, it depends on imports of refined petroleum to support its economy. The U.S. is a major trading partner in this sector, exporting refined fuel that accounts for over 70% of Mexico’s fuel consumption. Although foreign fuel is necessary, importing energy into Mexico is a highly regulated, multipart process.

Companies must have a permit from Mexico’s Secretariat of Energy (SENER) to import fuel. A SENER permit allows a company to pay the Special Tax on Products and Services (IEPS) through a licensed customs broker. After paying import taxes, companies with SENER permits can only sell their imports to companies with permits from Mexico’s National Energy Commission (CNE). A CNE permit allows a company to commercialize fuel products in Mexico, but without a SENER permit they are prohibited from importing fuel themselves. Mexico has made a concerted effort to separate importing and commercializing, as most companies are only permitted to have one of the permits.

Cartels bypass the regulations by using companies with CNE permits as fronts to broker foreign purchases, import products, and commercialize smuggled fuel without paying the IEPS. The Alert provides a general overview of the operation: Cartel- affiliated brokers with CNE permits—but without SENER permits—illegally purchase fuel directly from well-connected U.S. traders. These traders, primarily based in Texas, use industry connections to purchase products to source products from major refineries and distributors, diverting fuel designated for legitimate export to Mexico to cartel fronts and shell companies instead. After securing the products, cartels use a variety of methods to move fuel across the southern border, including falsifying customs documents to misrepresent products as those not subject to the IEPS import tax; bribing border officials; and using shipping containers to disguise and hide the fuel. Once in Mexico, the cartels legitimatize the smuggled fuel through forged invoices claiming the fuel was purchased in compliance with applicable regulations.

By significantly reducing costs to bring fuel to the commercial market in Mexico, cartels can sell fuel below market value at affiliated gas stations and unregulated roadside stops. The scheme both undercuts legitimate operators in the supply chain and deprives the state of significant tax revenue.

The Alert also details how Cartel-affiliated Mexican brokers pay their U.S. counterparts, primarily through international wire transfers and digital asset payments, including stablecoins, processed through U.S. and Mexican financial institutions and digital asset service providers, as well as through structured cash deposits along the southern border. U.S. traders then launder these illicit proceeds through purchases of luxury goods, real estate, and investment assets.

New Sanctions

In conjunction with the Alert, OFAC imposed sanctions on two individuals and nine associated entities involved with the scheme. These sanctions highlight the variety of roles necessary in the Cartel’s operation.

First, the government sanctioned Oscar Guillermo Juraidini Silva and his businesses for operating as an accountant and key planner of financial operations in the smuggling scheme. Second, the government sanctioned J. Refugio Ruiz Villagomez for knowingly smuggling fuel into Mexico. These sanctions were pursuant to Executive Order (“E.O.”) 14059, Imposing Sanctions on Foreign Persons Involved in the Global Illicit Drug Trade and E.O. 13224, Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism, as amended by E.O. 13886, Modernizing Sanctions To Combat Terrorism.

In a sign of deepening cross-border coordination, Mexico’s Financial Intelligence Unit announced that it had blocked the domestic bank accounts of Juraidini, Ruiz Villagomez, and nine additional individuals identified through its own parallel financial analysis—underscoring that U.S. and Mexican authorities are pursuing these fiscal fuel theft networks in tandem.

Key Takeaways for U.S. Financial Institutions

U.S. financial institutions should do their best to discern whether a customer is a reputable company operating in a way that is typical in the oil and gas industry for a company of their size. A non-exhaustive list of red flags in due diligence for industry relevant customer behavior includes:

  • A customer engages in traditional money laundering typologies with transactions having no clear connection to the industry (e.g., the sale or purchase of luxury goods, real estate, and investment assets)
  • A customer receives payments directly from Mexican companies without a SENER permit or with a CNE permit
  • A customer receives payments from a company affiliated with the Cartel
  • A customer has little to no business expenses, operations, or online presence
  • A customer is a U.S.-based company operating in Mexico without a Mexican subsidiary
  • A customer receives funds from small, recently established U.S. companies
  • A customer sends or receives a significant volume of non-descript payments
  • A customer receives significant transaction activity with insufficient infrastructure to store or transport the fuel
  • A customer receives funds from companies registered to residential addresses

Financial institutions who uncover suspicious activity in their due diligence processes must follow reporting requirements under the Bank Secrecy Act (BSA), which includes filing a Suspicious Activity Report (SAR) if a transaction is related to criminal activity. In the twelve months following FinCEN’s May 2025 alert, financial institutions filed more than 160 SARs detailing over $7 billion in suspicious activity connected to these schemes, with Texas and Florida the most commonly implicated states. Financial institutions operating along the southern border should also consider joining voluntary information sharing programs amongst financial institutions. If you would like to remain updated on these issues, please click here to subscribe to Money Laundering Watch. Please click here to find out about our Anti-Money Laundering Team.

On April 23, 2026, the Department of Justice announced charges against two Chinese Nationals, Huang Xing Shan and Jiang Wen Jie, for wire fraud, the seizure of $700 million in Cryptocurrency and the seizure of a Telegram Channel and 503 websites as part of the Department’s effort to combat foreign fraud schemes that target American citizens.

Huang and Jiang oversaw a cryptocurrency investment fraud operation at the Shunda compound in Burma. The Shunda compound is known to have operated from January 2025 to November 2025 and used scam websites and mobile applications designed to mimic legitimate investment platforms to convince its victims into draining their savings. 

The workers at the compound were trafficked individuals. Huang was a manager at the compound who reportedly used violence against the workers. Jiang was a supervisor who managed the workers’ efforts to defraud Americans.  The Shunda Compound was eventually seized by law enforcement, causing Huang and Jiang to attempt to replicate their scheme at a different compound in Cambodia.  In 2026, Huang and Jiang attempted to return to Burma but were arrested by Thai Law Enforcement for immigration violations. Their cases are currently being investigated by the FBI’s New York Field Office with assistance from Thai authorities.  The Complaint filed against Jiang Wen Jie can be found here. The Complaint filed against Huang Xing Shan can be found here.

The Scam Center Strike Force, which combines the powers of the U.S. Attorney’s Office with the Department of Justice’s Criminal Division, the FBI, and the U.S. Secret Service to secure America against Southeast Asian cryptocurrency-related fraud and scams, also announced the seizure of a Telegram Channel used to recruit workers.

The Telegram Channel had more than 6,0000 followers and was used to convince workers to travel to Cambodia with promises of high-paying employment. Once the workers arrived, they were held against their will and forced to participate in the fraud scheme. The workers specifically targeted Americans, imitating U.S. bank customer service agents and US law enforcement to convince victims to provide their bank account information. The Telegram seizure case is being investigated by FBI’s Miami Field Office, U.S. Secret Service Headquarters, and investigators at the U.S. Attorney’s Office for the District of Columbia. The Strike Force also announced that JPMorgan Chase, Microsoft, and Meta voluntarily took internal investigative measures to combat the fraud operating on their systems and occurring under their names.

Additionally, 503 dot-com web domains were seized. The domains were disguised as legitimate investment platforms. Victims reported to law enforcement that these platforms were causing them to unknowingly deposit cryptocurrency funds and view supposed “returns” on what they believed were legitimate investments.  In reality, the scammers received the investments and the returns. Now, when an individual visits these sites, they are informed the sites have been seized by law enforcement.

The Strike Force also announced that more than $701,962,392.15 in cryptocurrency has been identified as allegedly involved in laundering of funds stolen from victims of cryptocurrency investment fraud. The Strike Force aims to return the funds to victims.

In coordinated actions, the US Department of Treasury announced sanctions against individuals and entities perpetrating cryptocurrency investment fraud schemes against Americans using forced labor and violence in Cambodia, and Department of State announced an award of up to $10 million for anyone with information concerning the Tai Chang scam centers.

These actions are line with President’s Trump’s Executive Order Combating Cybercrime, Fraud, and Predatory Schemes Against American Citizens. Fighting fraud continues to be a top priority of this Administration’s Justice and State Departments.

If you would like to remain updated on these issues, please click here to subscribe to Money Laundering Watch. And please click here to find out about Ballard Spahr’s Anti-Money Laundering Team.

Last month, the U.S. Department of the Treasury announced a new cybersecurity information‑sharing initiative led by its Office of Cybersecurity and Critical Infrastructure Protection (OCCIP). The program is designed to give eligible U.S. digital asset firms access to the same actionable cyber‑threat information Treasury already provides to traditional financial institutions. According to Treasury, the effort responds to a rapidly evolving threat environment and implements a key recommendation from the President’s Working Group on Digital Asset Markets (PWG) report issued under Executive Order 14178.

The announcement marks Treasury’s most direct step to date in extending its critical‑infrastructure protection mission to the digital‑asset sector—an industry Treasury now describes as “an increasingly important part of the U.S. financial sector.”

A New Cybersecurity Information‑Sharing Channel for Digital Asset Firms

Treasury’s press release explains that OCCIP will provide participating digital asset firms with “timely, actionable cybersecurity information” at no cost. The information mirrors what Treasury already shares with banks and other traditional financial institutions.

Treasury officials emphasized several themes:

  • Growing systemic importance of digital asset firms. Assistant Secretary for Financial Institutions Luke Pettit stated that the resilience of digital asset firms is now “critical to the health of the broader system.”
  • Cybersecurity as a prerequisite for responsible innovation. Counselor to the Secretary for Digital Assets Tyler Williams linked the initiative to the principles of the GENIUS Act, noting that strong cybersecurity and operational resilience are foundational to digital‑asset market development.
  • Escalating threat landscape. Deputy Assistant Secretary for Cybersecurity Cory Wilson highlighted the increasing frequency and sophistication of cyberattacks targeting digital‑asset platforms and the need for more robust, real‑time threat information.

Eligible firms may contact OCCIP directly to enroll.

How the Initiative Aligns with the PWG’s Digital‑Asset Recommendations

The April 9 announcement explicitly ties the OCCIP initiative to the PWG’s July 2025 report, Strengthening American Leadership in Digital Financial Technology, issued pursuant to Executive Order 14178.

Several recommendations in the PWG report provide the policy foundation for Treasury’s new program:

  1. Expand public‑private information sharing to counter illicit finance and cyber threats.
    The PWG report calls for Treasury to “encourage greater information sharing between the private and public sectors to more effectively target bad actors operating in the digital asset ecosystem,” emphasizing that such sharing should be used solely for illicit‑finance and national‑security purposes. Treasury’s new initiative operationalizes this recommendation by extending its existing financial‑sector threat‑information channels to digital‑asset firms.
  2. Equip digital‑asset actors to mitigate risk.
    The PWG report identifies a need for clearer expectations and more support for digital‑asset firms navigating AML/CFT and cybersecurity risks. It encourages agencies—including Treasury—to provide guidance and tools that help firms understand and meet their obligations. Providing direct access to actionable cyber‑threat intelligence is consistent with that objective.
  3. Promote operational resilience as digital assets integrate into the financial system.
    The PWG report frames cybersecurity as essential to responsible innovation and to the stability of U.S. financial markets as digital‑asset activity grows. Treasury’s messaging in the April 9 release echoes this theme, underscoring that digital‑asset firms’ resilience is now a matter of broader financial‑system health.

What This Means for Digital Asset Firms

Although the initiative is voluntary, it signals Treasury’s expectation that digital‑asset firms should begin aligning their cybersecurity posture with the standards long applied to banks and other regulated financial institutions.

  1. Heightened expectations for threat‑intelligence integration.
    Access to Treasury’s cyber‑threat information is only useful if firms have the internal capability to ingest, triage, and act on it. Firms may need to evaluate whether their security operations centers, incident‑response processes, and governance structures can operationalize this information effectively.
  2. A clearer link between cybersecurity and financial‑crime compliance.
    The PWG report situates cybersecurity squarely within the broader illicit‑finance risk framework. Treasury’s initiative reinforces that cyber‑risk and AML/CFT risk are increasingly intertwined—particularly for digital‑asset platforms that face both technical and financial‑crime threats.
  3. Early alignment with future regulatory expectations.
    While the initiative itself is not a rulemaking, it reflects Treasury’s policy trajectory. As digital‑asset firms become more integrated into the financial system, regulators may expect them to demonstrate cybersecurity maturity comparable to traditional financial institutions. Participation in OCCIP’s program could become a de facto indicator of baseline preparedness.

How This Fits into Treasury’s Broader Digital‑Asset Strategy

The OCCIP initiative is one component of a broader shift in Treasury’s approach to digital‑asset oversight:

  • National‑security framing. The PWG report repeatedly emphasizes the need to counter illicit finance and protect U.S. financial stability as digital‑asset markets grow. Treasury’s April 9 announcement continues that framing by positioning cybersecurity as essential to safeguarding consumers and markets.
  • Technology‑neutral expectations. The PWG report encourages regulators to adopt technology‑neutral frameworks that apply consistent standards across financial activities, regardless of whether they involve digital assets. Extending existing cybersecurity information‑sharing channels to digital‑asset firms reflects that approach.
  • Operationalizing Executive Order 14178. The Executive Order directs agencies to support responsible digital‑asset innovation while protecting national security. Treasury’s initiative is a concrete step toward implementing that mandate.

Treasury frames the initiative as a concrete step toward strengthening operational resilience in the digital‑asset sector and advancing the policy objectives outlined in Executive Order 14178 and the PWG report. Some market participants, however, may assess potential confidentiality, operational, or integration considerations associated with receiving government threat intelligence, as well as whether participation in a voluntary program could carry additional compliance expectations. More broadly, the effectiveness and implementation of expanded public‑private information‑sharing efforts will likely remain an area of industry interest and discussion. It remains to be seen how widely the industry will participate and what practical impact the initiative will have in addressing evolving cyber threats.

Looking Ahead

Treasury’s launch of this cybersecurity information‑sharing initiative is a notable development for digital‑asset firms, signaling that the sector is now firmly within the scope of Treasury’s critical‑infrastructure protection efforts. It also reflects the Administration’s broader strategy: encourage innovation, but pair it with heightened expectations for operational resilience and risk management.

For digital‑asset firms, the message is clear. As the sector becomes more interconnected with the traditional financial system, regulators expect cybersecurity maturity to keep pace. Treasury’s new program offers a pathway to do that—while also previewing the direction of future oversight.

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On February 13, 2025, FinCEN issued an order granting exceptive relief for covered financial institutions from certain Customer Due Diligence (“CDD”) requirements for new account openings. The exceptive relief is part of deregulation efforts, consistent with Executive Order 14192, “Unleashing Prosperity Through Deregulation,” and Section 6403(d) of the Corporate Transparency Act (the “CTA”).

What’s Covered by the Exceptive Relief?

The CDD rule requires covered financial institutions to identify and verify the beneficial owners of legal entity customers at account opening. Under the exceptive relief, FinCEN will now require covered financial institutions to obtain and verify the beneficial owners of legal entity customers:

  1. When a legal entity customer first opens an account;
  2. Any time the covered financial institution has knowledge that would reasonably call into question the reliability of beneficial ownership information that was previously provided; and
  3. As necessary for on-going CDD compliance. 

Covered financial institutions must still adhere to other Bank Secrecy Act/Anti-Money Laundering requirements, including all other CDD requirements.

Nothing precludes a covered financial institution from continuing the practice of collecting or verifying beneficial ownership at each new account opening or following the institution’s own risk-based policies and procedures. FinCEN highlights that it is “within the discretion of the covered financial institution” whether to avail themselves of this exceptive relief.

FinCEN’s Previous Guidance and Exceptive Relief Efforts

FinCEN noted that the exceptive relief was due, in part, to the industry’s reactions to previous relief efforts. Ultimately leading FinCEN to provide this broader relief.

FinCEN has previously issued guidance, allowing covered financial institutions to utilize previous beneficial ownership forms or information obtained from legal entity customers at new account openings, provided that the customer certified or confirmed that the information was still accurate and the financial institution had no knowledge calling into question the accuracy of the information. In addition, FinCEN previously provided exceptive relief to legal entity customers who open new accounts as a result of: a certificate of deposit rollover; a renewal, modification, or extension of a loan where there was no underwriting requirement or approval; a renewal, modification, or extension of a commercial line of credit or credit card account that does not require underwriting review and approval; or a renewal of a safe deposit box rental. This current exceptive relief supplements FinCEN’s previous guidance and exceptive relief.

Looking Ahead at the CDD Rule

The CTA promised revisions to the CDD rule to account for the changes made by the beneficial ownership information and access rules. FinCEN’s current rulemaking agenda lists a notice of proposed rulemaking slated for this Spring. Given the changes to the scope of the CTA, it is unclear how the CDD rule will be revised.

If you would like to remain updated on these issues, please click here to subscribe to Money Laundering Watch.  Please click here to find out about Ballard Spahr’s Anti-Money Laundering Team.