AML Independent Review for Money Services Businesses

An AML independent review isn’t just a regulatory checkbox. It’s the document a FinCEN examiner opens first, and the one that sets the tone for everything that follows.

At Hodder Law, we conduct attorney-led, independent AML reviews for money services businesses across the United States. That means your review isn’t just compliant. It’s legally sound, privilege-protected where applicable, and built to withstand scrutiny.

What Is an AML Independent Review?

The Bank Secrecy Act mandates independent testing. This is what an AML independent review is: a mandatory evaluation of your AML compliance program conducted by an objective professional with no role in designing or operating it.

Under the BSA and FinCEN regulations (31 CFR § 1022.210 for MSBs), every money services business must conduct independent testing of AML compliance policies. The review assesses whether your policies, procedures, and controls are not only in place but also actually working.

The three things every independent review establishes:

Independence: The reviewer cannot be someone who built or runs your compliance program
Design and documentation: Your written policies reflect how your business actually operates
Operational effectiveness: Controls aretested in practice, not just reviewed on paper

If your MSB handles cash, crypto, wire transfers, or cross-border transactions, your exposure is higher, and so is the standard regulators will apply to your review.

Do You Need an AML Independent Review?

FinCEN requires all registered money services businesses to conduct independent testing of their AML program. This includes:

Bitcoin ATM operators and cryptocurrency kiosks
Crypto exchanges and OTC desks
Money transmitters and payment processors
Currency dealers and exchangers
Check cashers and prepaid card issuers
Gift card platforms and stored value providers

Most MSBs should conduct independent testing annually. The frequency may increase based on your transaction volume, product risk, customer base, or prior exam findings. If you are preparing for a FinCEN or IRS examination, applying for state money transmitter licenses, or onboarding a banking partner, a current, regulator-ready independent review is non-negotiable.

What Does an AML Independent Review Cover?

A thorough AML independent review examines every component of your BSA/AML compliance program, including:

Policies and Procedures: A review of your written AML program against current FinCEN requirements.
Risk Assessment: Evaluation of whether your institutional risk assessment accurately reflects your customer base, geographies, products, and transaction activity.
Customer Identification Program (CIP): Testing of KYC onboarding files and identity verification procedures against BSA requirements and your own written standards.
Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD): File sampling to verify that beneficial ownership is captured and that high-risk customers receive appropriate scrutiny.
Transaction Monitoring: Review of your monitoring systems, alert logic, and case management to assess whether suspicious activity is being identified and escalated correctly.
SAR and CTR Filing: Evaluation of suspicious activity reports and currency transaction report filings, including filing decisions.
OFAC Screening: Assessment of your sanctions screening process, list coverage, and escalation procedures for potential matches.
Training Program: Review of AML training records, content, and frequency across relevant staff and agents.
Prior Examination Findings: Verify that deficiencies from prior reviews or regulatory examinations have been addressed and remediated.”

At the conclusion of the review, you receive a written report with findings, risk ratings, and a prioritized remediation plan, formatted as a regulator expects.

Why Work With a Lawyer for Your AML Independent Review?

The best practice for an AML independent review is to hire a lawyer specializing in compliance with money-laundering regulations.

When a review uncovers a significant gap, a series of unfiled SARs, or a systemic failure in your transaction monitoring, what you do next has legal consequences. A compliance consultant can document the finding. An attorney can help you understand your exposure, advise on voluntary disclosure, and represent you if a regulator comes knocking.

Working with Hodder Law means:

Attorney-client privilege applies to legal advice given in connection with the review
Regulatory representation is available if findings escalate. We offer Title 31 audit representation in person or by video
Legal opinions on where your program touches gray areas in state or federal law
Practical, business-aware findings Hodder Law understand how crypto MSBs actually operate, and our recommendations are implementable

We don’t just tell you what’s wrong. We help you fix it, protect you while you do, and stand beside you if you need to answer for it.

Frequently Asked Questions

How often does an MSB need an AML independent review?

Most MSBs conduct independent testing annually. The BSA does not mandate a specific frequency for all MSBs, but annual testing is the standard regulators expect and what we recommend for any business handling moderate to high transaction volumes. Higher-risk MSBs, including those operating crypto kiosks, cross-border remittance, or OTC services, should not wait longer than 12 months between reviews.

What’s the difference between an AML independent review and an AML audit?

An AML audit typically refers to a broader internal or third-party audit function. An AML independent review, or independent testing under the BSA, is a specific regulatory requirement. At Hodder Law, our independent reviews satisfy this regulatory requirement.

Can my compliance officer conduct the independent review?

No. FinCEN requires the reviewer to be independent from the AML program. This is why most MSBs engage outside counsel or a third-party compliance firm. Hodder Law conducts the review with no prior involvement in your program.

What does the review produce?

You receive a written report documenting the scope and methodology of the review, findings by risk area, a risk rating for each finding (critical, high, medium, or low), and a prioritized action plan. The report satisfies FinCEN examination requirements and banking partner due diligence requests.

Can Hodder Law represent me if FinCEN or the IRS opens an examination?

Yes. Title 31 audit representation, including attending the audit in person or by video, preparing all responses to IRS inquiries, and drafting responses to any deficiency letter, is a service we offer. Having the same firm that conducted your independent review represent you in an examination is a significant advantage.

How long does an AML independent review take?

Scope and timing depend on the size and complexity of your operation. A straightforward MSB review typically takes two to four weeks from document collection to final report delivery. More complex operations, such as multi-state, high-volume, or those with prior exam findings, may take longer. Contact us for a timeline estimate specific to your business.

AML Independent Review Checklist

Use this checklist to assess if your current program is review-ready:

Program Documentation

Written AML program approved by senior management or board
Risk-based policies tailored to your specific business model
Designated BSA compliance officer with defined responsibilities
AML procedures updated within the last 12 months

Customer Identification and Due Diligence

CIP procedures meeting FinCEN identity verification requirements
Beneficial ownership collected for business customers (where applicable)
EDD procedures in place for high-risk customers and transactions
CDD files complete and accessible for sampling

Transaction Monitoring and Reporting

Monitoring system in place with documented thresholds and logic
SAR filing decisions documented with supporting rationale
CTR filings current and complete
OFAC compliance, such as screening applied at onboarding and on an ongoing basis

Training and Oversight

AML training completed by all relevant staff within the last year
Training records maintained and accessible
Prior audit or exam findings addressed with documented remediation

Independent Testing

Independent review conducted within the past 12 months
Written report on file with findings and action items
Remediation progress tracked and documented

If you have gaps in this list, we can help you close them before an examiner does.

Work With Hodder Law

Hodder Law has been advising money services businesses on AML compliance since the early days of crypto regulation. We understand the operational realities of running a Bitcoin ATM network, an OTC desk, a digital asset exchange, or a money transmission business, and we know what regulators look for when they arrive.

Our AML independent reviews give you three things: an accurate picture of where your program stands, a clear plan for closing any gaps, and the legal protection that only comes from working with an attorney.

If you need an independent review completed before a license renewal, a banking relationship, or a scheduled exam, or if it’s simply been more than a year since your last on, let’s talk.

Hodder Law AML Independent Reviews include:

Written report with findings and risk ratings
Prioritized remediation action plan
BSA/FinCEN compliance verification
OFAC compliance
SAR and CTR filing review
Attorney-client privilege on legal advice
Optional Title 31 audit representation

Hodder Law serves MSBs, crypto exchanges, Bitcoin ATM operators, OTC desks, payment processors, and other regulated financial businesses across the United States.

Schedule Your Independent Review now: Contact Hodder Law