MSB (Money Services Business)

What is an MSB?
Money Services Business is a category defined by FinCEN, the US Treasury bureau that administers the Bank Secrecy Act (BSA). It covers non-bank businesses that offer money transmission, currency exchange, check cashing, prepaid access, or money orders and traveler's checks.
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MSBs in crypto
Since 2013, FinCEN has treated businesses that exchange or administer convertible virtual currency as money transmitters. In practice, that brings most US crypto exchanges, custodial wallets, OTC desks, and crypto payment processors into MSB status.
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Core obligations

• Register with FinCEN (Form 107) within 180 days of starting business, and renew every two years
• Maintain a written, risk-based AML program
• File Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs)
• Keep required records, including Travel Rule information for transfers of $3,000 or more

MSB registration vs. money transmitter licensing
FinCEN registration is a federal requirement. It is not a license to operate. Most states separately require a money transmitter license (MTL), so a crypto business typically needs both.