Getting a crypto exchange license in 2025 requires federal MSB registration, state-specific licenses like BitLicense, robust AML/KYC systems, and $500K+ in capital. Learn the steps, costs, and pitfalls to avoid shutdowns.
MSB Registration: What It Is, Why It Matters, and How Crypto Businesses Stay Legal
When you run a crypto exchange, P2P platform, or even a crypto ATM in the U.S., you’re not just building a tech product—you’re running a money services business, a financial entity that transfers, exchanges, or sells money or value, as defined by U.S. law. Also known as MSB, it’s not optional if you’re handling customer funds. The term might sound bureaucratic, but it’s the difference between staying open and getting shut down by FinCEN.
MSB registration isn’t about getting a badge—it’s about accountability. If your business moves crypto for others, collects fees, or acts as an intermediary between buyers and sellers, you’re legally an MSB. That means you must register with FinCEN, implement a compliance program, report suspicious activity, and verify your users’ identities. It’s the same rule that applies to traditional money transmitters like Western Union. The crypto world doesn’t get a pass just because it’s digital. In fact, regulators treat crypto MSBs with extra scrutiny because of past scams and money laundering cases tied to unregistered platforms.
Many crypto startups think they can fly under the radar, especially if they’re small or operate through P2P channels. But look at Nigeria’s underground crypto economy—it thrived because users found ways around banks, not because the law didn’t apply. In the U.S., that approach doesn’t work. The SEC and FinCEN have gone after dozens of unregistered platforms, from crypto ATMs to decentralized exchanges that handled fiat on-ramps. Even if your platform doesn’t hold funds, if you’re facilitating trades between users and cash, you’re likely an MSB. And if you’re not registered, you’re already in violation.
Thailand’s 2025 ban on foreign P2P platforms shows how governments are tightening control. They’re not banning crypto—they’re banning unlicensed operators. The same logic applies in the U.S. MSB registration isn’t about stopping innovation; it’s about making sure innovation doesn’t become a loophole for fraud. The platforms that survive are the ones that build compliance into their foundation, not bolt it on later.
You’ll find posts here that cover how crypto businesses handle compliance, what happens when they skip registration, and how real companies navigate FinCEN’s rules. Some of them show the consequences of ignoring the law. Others break down the exact steps to register, what forms to file, and how to avoid common mistakes that lead to fines or criminal charges. Whether you’re running a small P2P service or scaling a crypto exchange, understanding MSB registration isn’t optional—it’s the first line of defense.