Other regulatory areas to watch
Law enforcement and national security
The new administration is expected to maintain a strong emphasis on AML/CFT compliance as a tool for safeguarding national security. One way we’ve already seen this is with a recent FinCEN Geographic Targeting Order (GTO) requiring money services businesses (MSBs) to file currency transaction reports on any cash transaction over $200 in specific southwestern border zip codes. Financial institutions that provide financial services to these MSBs should ensure that their customers are adhering to these new requirements and support law enforcement efforts by ensuring timely and accurate reporting of suspicious activity when necessary.
Drug trafficking and trade-based money laundering (TBML)
Drug trafficking remains a top concern for the new administration, as evidenced by the Department of Justice’s noteworthy cases against TD Bank and Brinks. FinCEN issued an alert in June 2024 highlighting the risks associated with the illicit fentanyl supply chain and the deceptive financial practices used to obscure these transactions.
More recently, the administration issued a Presidential Action designating certain cartels as Foreign Terrorist Organizations, followed by the State Department's formal designations on February 19, 2025. These actions signal increased regulatory scrutiny on financial flows linked to drug trafficking and reinforce the need for strong AML/CFT measures for financial institutions.
With the U.S. imposing new tariffs on Canada and Mexico, experts predict that drug cartels will adapt by increasing trade-based money laundering (TBML) efforts. Mexico remains a key transit point for fentanyl entering the U.S., with precursor chemicals sourced from China.
Investment advisor sector and AML/CFT compliance
FinCEN recently issued a final rule aimed at addressing illicit finance risks in the investment advisor sector. This rule is meant to assist in the fight against terrorist financing and corruption. The new administration may refine these regulations further, increasing compliance obligations for financial institutions that interact with investment advisors. As previously mentioned, the administration may delay the effective date, currently scheduled for January 1, 2026, until a review of the rule can be conducted.
Virtual assets and cryptocurrency regulation
The regulatory landscape for cryptocurrency and virtual assets continues to evolve, with a focus on preventing illicit finance activities. The administration has already issued an Executive Order to support the growth of the cryptocurrency industry with a lighter touch on regulations. Financial institutions involved in this space should review their policies on virtual asset risk management.
Cybercrime and financial fraud
Cybercrime is a growing concern for financial institutions and regulators. Cybercrime continues to be a significant global problem, with costs projected to reach $10.5 trillion annually by 2025. The administration may expand efforts to combat cyber-enabled financial crimes through new reporting requirements and cybersecurity expectations. Financial institutions should assess their cybersecurity controls and fraud detection capabilities to mitigate risks.
