FinCEN Reshapes U.S. Anti-Money Laundering Rules Amid Rising Risks in 2025

The year 2025 has already brought sweeping changes to the United States’ anti-money laundering landscape, with the Financial Crimes Enforcement Network (FinCEN) taking the unusual step of overhauling long-standing obligations under the Bank Secrecy Act (BSA) while revising beneficial ownership requirements for millions of entities. At the same time, new responsibilities are emerging for digital assets, particularly stablecoins, under the newly enacted GENIUS Act. These reforms have been framed as modernization, but they have also raised questions about whether the system’s defenses against money laundering and related financial crime are being weakened in the process.

The threat of laundering has not diminished, with professional enablers continuing to exploit corporate secrecy and criminal syndicates increasingly turning to stablecoins. FinCEN’s recalibration of reporting rules, beneficial ownership requirements, and digital asset oversight will directly shape how financial institutions, regulators, and criminals operate in the years ahead. The test now lies in whether the U.S. can maintain effective safeguards while simultaneously cutting back on compliance burdens.

The BSA has long been the backbone of American anti-money laundering efforts, anchored by Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs), which provide law enforcement with crucial data. In 2025, FinCEN acknowledged that while these reports remain vital, the sheer volume and complexity of filings have created inefficiencies for both investigators and financial institutions. The agency has begun the process of streamlining the reporting framework, seeking to make SARs more targeted and CTRs more practical. This initiative is consistent with the AML Act’s mandate to move compliance away from a “check the box” approach and toward a risk-based model. By allowing financial institutions to focus resources on higher-risk customers and scale back on lower-risk accounts, FinCEN hopes to redirect compliance toward real threats such as organized crime, terrorist financing, and large-scale fraud.

Yet efficiency for institutions could also create opportunities for criminals. If banks reduce scrutiny of accounts labeled low-risk, launderers may attempt to disguise illicit transactions under those very categories. The modernization of BSA reporting, therefore, requires precise calibration, with regulators and financial institutions relying on advanced analytics, data sharing across institutions, and artificial intelligence systems to prevent blind spots that sophisticated actors can exploit.

Perhaps the most controversial change of 2025 has come in the form of FinCEN’s interim final rule exempting U.S.-formed companies and U.S. persons from beneficial ownership reporting obligations under the Corporate Transparency Act (CTA). The decision effectively frees millions of domestic entities from filing beneficial ownership information (BOI) with FinCEN, confining the reporting requirement to foreign entities registered to do business in the United States. This exemption risks reopening old vulnerabilities. Anonymous shell companies have long been a preferred tool for laundering illicit funds by concealing the true identity of beneficial owners. By excluding domestic companies from BOI reporting, FinCEN has reduced compliance costs but at the potential expense of transparency.

Money laundering through U.S.-based entities can take many forms, including real estate purchases, trade-based laundering, and funneling illicit funds through intricate webs of limited liability companies. Without a mandatory BOI registry covering domestic companies, investigators will face significant hurdles in tracing ownership structures behind questionable transactions. Criminal groups may interpret this exemption as tacit permission to revive older schemes involving shell companies incorporated in Delaware, Nevada, or Wyoming. Foreign entities will still be required to disclose beneficial ownership, but the absence of a parallel obligation for domestic firms risks creating a two-tier system in which criminals deliberately choose U.S. incorporation to sidestep disclosure.

At the same time, FinCEN is pushing aggressively into the digital asset space. The GENIUS Act now requires payment stablecoin issuers to comply with BSA requirements, subjecting them to customer identification, transaction monitoring, and reporting obligations. This represents a major expansion of regulatory oversight into a sector that has already attracted launderers. Stablecoins are particularly appealing for illicit finance because they combine the speed of digital transfers with the stability of traditional currency values. Criminal groups have already exploited them to move funds rapidly across borders while avoiding traditional correspondent banking systems. FinCEN’s forthcoming rules will place monitoring responsibilities on issuers, compelling them to adopt blockchain analytics, artificial intelligence detection, and cross-jurisdictional reporting systems.

The GENIUS Act also emphasizes innovation in detecting illicit activity, mandating research into artificial intelligence, blockchain tracing, and other advanced tools to help regulators keep pace with launderers who increasingly exploit decentralized exchanges and privacy-enhancing technologies. Yet challenges remain. Many stablecoin issuers are structured outside U.S. jurisdiction or operate under decentralized governance models, complicating enforcement. Criminals also often use stablecoins only briefly before converting funds into less regulated assets, creating fleeting laundering windows that are difficult to capture.

The juxtaposition of beneficial ownership exemptions and stablecoin regulation creates a curious duality. On one hand, transparency has been reduced for U.S. entities, potentially facilitating traditional laundering methods. On the other, oversight of digital assets is expanding, reflecting regulators’ recognition that crypto-related laundering is an urgent threat. Whether these shifts strike the right balance between flexibility and transparency will determine the resilience of the U.S. anti-money laundering regime.

Ultimately, the modernization efforts of 2025 can be viewed as a balancing act between efficiency and enforcement. Financial institutions are likely to welcome reduced reporting obligations and greater discretion in compliance. Digital asset operators may accept new oversight as a step toward legitimacy. But the criminal underworld is no less adaptable. By exempting domestic firms from BOI reporting, FinCEN has arguably made U.S. incorporation more attractive for launderers worldwide. At the same time, by imposing BSA rules on stablecoins, regulators have signaled that digital assets will no longer remain a compliance gray zone. Criminal networks may respond by shifting between traditional and digital laundering techniques, exploiting whichever sector presents weaker safeguards at any given time.

The ultimate success of this framework will depend on its implementation. FinCEN must ensure that streamlined SARs and CTRs continue to provide investigative value, that stablecoin monitoring effectively tracks cross-border flows, and that law enforcement resources are sufficient to pursue complex financial crime cases. Without effective execution, criminals will continue to exploit both corporate secrecy and emerging technologies to obscure illicit transactions. Whether the modernization agenda strengthens or undermines the U.S. AML regime will depend entirely on how well these reforms are carried out.

By fLEXI tEAM