Remote VASP serving residents in United States
Foreign-incorporated entity that offers exchange, custody, or transfer services to residents of a jurisdiction without establishing a local entity or office.
Remote VASP is not permitted in United States.
Verdict Details
- Permitted
- no
- Local entity required
- Yes
- Licensing burden
- High
- Last updated
- 2026-05-28
AML Obligations
- FinCEN MSB registration required if 'doing business wholly or in substantial part within the United States' — interpreted broadly to include serving US residents from abroad
- Travel Rule applies to all transmittals at or above $3,000 (Bank Secrecy Act)
- State-by-state money transmitter licensing required in addition to federal MSB — no federal preemption
- FATF Recommendation 16 / Travel Rule equivalence enforced via FinCEN guidance
Key Restrictions
- DOJ has criminally prosecuted offshore exchanges (BitMEX 2020, Binance.com 2023) for serving US persons without registration
- OFAC sanctions exposure applies regardless of operator location — US persons (or any USD-denominated transaction) cannot be served if on the SDN list
- SEC's broad interpretation of securities law (post-SEC v. Coinbase 2023) extends to foreign platforms offering listed assets to US persons
- Geofencing is the de-facto operating posture: most foreign exchanges block US IPs and require non-US KYC declarations
Key Risks
- Highest enforcement-risk jurisdiction globally — DOJ, FinCEN, SEC, CFTC, OFAC all have demonstrated willingness to act extraterritorially
- Civil and criminal penalties include forfeiture of crypto funds, personal liability for officers, and Bank Secrecy Act conspiracy charges
- Even passive presence (US-residing developers, US server colocation, US-domiciled customers via VPN) has been used as the jurisdictional hook
- 'Wind-down' settlements typically require operator to exit the US market, pay deferred-prosecution penalties, and submit to monitoring
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
FinCEN — AML/BSA, MSB registration, Travel Rule enforcement
SEC — Securities, token classification (Howey Test), broker-dealer/ATS registration
OFAC — Sanctions compliance for virtual currency transactions
DOJ — Criminal enforcement — money laundering, fraud, sanctions evasion
Bank Secrecy Act (1970) — AML/CFT, MSB registration and reporting obligations
Verdict Attribution
- Source:
- AI-Generated · Reviewed
- Curated by:
- scott@savyadvisors.com
- Last updated:
- 2026-05-28
- Confidence:
- high
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
US is effectively closed to remote VASPs without registration. Operating model used by Binance.com (2017-2023) and BitMEX (2014-2020) resulted in DOJ criminal prosecutions. Pending counsel review.
Questions this verdict aims to answer
- May a non-resident provider serve residents from abroad?
- Does cross-border service trigger licensing, registration, or AML obligations?
- What enforcement risk exists for unlicensed remote operators?