Independent Audits for Money Service Businesses:

If you operate a money service business (MSB), like a Bitcoin ATM fleet, there are certain rules, regulations, and guidelines that your business has to follow based on government regulations. These guidelines include establishing an anti-money laundering (AML) program that includes an independent audit function to test the controls and find out if the MSB is following its written AML program.     

What is an independent audit and what does it determine? 

The independent audit focuses on ensuring that a company’s AML program sufficiently prevents money laundering and terrorist financing, while adhering to applicable regulations and the company’s own policies and procedures.     

A successful audit should determine whether the business is operating in compliance with the requirements of the Bank Secrecy Act and the business’ own policies and procedures. 

What is done during an independent audit? 

• An unbiased appraisal of all required elements of the company’s AML program including, its procedures, internal controls, record keeping, reporting functions, and training.   
• Testing of the internal controls, transaction systems, and procedures to identify any weaknesses and/or improvements.   
• Review of the compliance officers’ actions. 
• Ensure deficiencies have been addressed from previous audits.  
• Recommend appropriate corrective actions and best practices to enhance or better the program. 

Who is recommended to perform the independent audit? 

• License auditors  
• A certified public accountant 
• Third-party consultants/businesses 
• An attorney 
• Any officer or employee (or group thereof) can do it, except the compliance officer appointed in the companies’ AML program or the compliance officer’s direct report(s). 

Nevertheless, the independent review is a complex and tedious investigation that requires specialized knowledge of money services businesses and the inconsistently applied regulatory framework that governs them.      

How often should a money service business be audited? 

According to FinCEN, the frequency in which a money services business should conduct independent reviews depends on the business’ risk assessment, which considers the business’ products, services, customers, and geographic locations. 

Typically, money services business should aim to conduct an independent review on a yearly basis 

What are the benefits of an independent audit? 

• Bolster your compliance: Independent audits help your business stay up-to-date with all the necessary compliance regulations.  
• Stay out of trouble: Independent audits can help you address issues and avoid fines and/or possibly even jail time.  
• Get an outsider’s opinion: With an independent audit, you can get an unbiased opinion that could help improve your program.  
• Have peace of mind: An independent audit is an additional step money service businesses can take to make sure they are compliant with all regulations.      

BTM Compliance:  

Are you a Bitcoin ATM operator looking for someone to help you with your compliance needs? If so, look no further.    

BTM Compliance is a leading Bitcoin ATM compliance and auditing company that offers custom build compliance programs, independent reviews, and other services for MSBs.  

Contact them today here to learn about how they can help you meet all your compliance needs.  

This article is for informational purposes. This is not legal or compliance advice. For any advice on these matters reach out to your legal team and compliance officers.