Regulatory Roundup - July 2025: FinTechs Under Fire, Sanctions Tighten, and AI Policy Expands
- Steve Marshall
- Jul 10
- 3 min read
Updated: Oct 2
This month’s roundup highlights the growing regulatory pressure on FinTechs as enforcement actions mount and compliance expectations rise. From multi-million-dollar AML fines to new sanctions targeting opioid-linked money laundering, regulators are making it clear: no sector is exempt. Plus, the US takes steps to counter money laundering and fentanyl trafficking, the OFSI offers new financial sanctions guidance, and the EU unveils a sweeping International Digital Strategy, signaling its ambitions on the global AI and tech policy stage. Here’s what compliance leaders need to know now.
ANTI-MONEY LAUNDERING
SPECIAL ANALYSIS: Growing regulatory scrutiny on FinTechs
FinTechs are facing increasing scrutiny from regulators, and even customers, for financial crimes compliance weaknesses as their numbers grow. FinTechs are focused on innovation and growing volume and revenue, while spending on compliance systems tends to take a back seat. At the same time, criminals look for the weakest links and prey on these entities.
This year alone, Seychelles-based crypto fintech company KuCoin pled guilty to operating an unlicensed money transmitting business—and failing to register with FinCEN, implement an AML/KYC program, and filing SARs—resulting in nearly $300 million in penalties and a two-year exit from the United States financial market. In addition, California’s Hatch Bank consent order suggests states may be eyeing BaaS risks as sponsor banks attempt to scale FinTech partnerships faster than their compliance infrastructure can keep up.
And the latest FinTech to feel the sting of regulatory scrutiny is British digital bank Monzo, who the FCA fined 21 million pounds ($28.57 million) for inadequate protection against financial crime—included taking on customers who had listed landmarks such as Buckingham Palace as their address—due to rapid growth over several years.
Unlike fast-growth FinTechs, incumbent banks have largely learned from their mistakes and those of others in the industry and have implemented robust financial crimes compliance systems as a result. FinTechs must recognize they are being judged by the same standards as traditional financial institutions. Now is the time for them to invest in the tools and expertise that will help them detect and prevent financial crime and meet new challenges as they scale for growth.
Learn more about the compliance imperative in our new FinTech AML compliance playbook:
US Treasury issues historic orders to counter fentanyl
FinCEN issued orders identifying three Mexico-based financial institutions as being of primary money laundering concern in connection with illicit opioid trafficking, and prohibit, respectively, certain transmittals of funds involving some banks. The Fentanyl Sanctions Act and the FEND Off Fentanyl Act orders provide the Treasury with additional authority to target money laundering associated with the trafficking of fentanyl and other synthetic opioids, including by cartels.
SANCTIONS
OFAC penalizes GVA Capital Ltd. for violating Ukraine/Russia-related sanctions
OFAC has issued a penalty notice imposing a nearly $216 million penalty on GVA Capital Ltd., a venture capital firm based in San Francisco, California, for violating OFAC’s Ukraine/Russia-related sanctions and for failing to comply with an OFAC subpoena.
OFSI issues guidance on sanctions compliance in the Art Market Participants and High Value Goods sector
OFSI’s latest guidance includes assessments covering threats to financial sanctions compliance relevant to Art Market Participants (AMPs) and High Value Goods (HVDs), which have become “relevant firms” and are now subject to financial sanctions reporting obligations. The assessment is intended to assist AMPs and HVDs in complying with these reporting obligations and UK financial sanctions more broadly.
OFSI’s new video series focuses on the basics of financial sanctions
OFSI has released a new video series, “Financial Sanctions: The Basics,” focusing on six key areas:
ARTIFICIAL INTELLIGENCE
The EU sets out its International Digital Strategy
The European Commission and the High Representative are setting out a joint vision for the EU’s external action for digital. As the digital revolution reshapes economies and societies in a more challenging global geopolitical landscape, the new EU International Digital Strategy aims to demonstrate the EU as a stable and reliable partner, open to digital cooperation with allies and partners, by laying out the details of its vision, objectives, and focus.
Stay ahead of shifting regulations with expert guidance
As compliance requirements grow more complex, FinScan’s Advisory Services team is here to support you every step of the way. From strengthening model governance and data quality to navigating sanctions and emerging technologies, we’ll help you enhance your compliance program with confidence. Let’s work together to build a stronger, future-ready foundation.
