How to Get an MSB License: Build From Scratch or Acquire Ready-Made

The Money Services Business (MSB) license has become one of the most strategic regulatory assets in the modern fintech world. Whether your goal is to launch a payments company, a digital asset exchange, or an international remittance platform, operating under a registered MSB gives you access to banking, compliance credibility, and global partnerships that would otherwise be out of reach.

At Sodalite Capital, we’ve helped fintech founders, family offices, and investment groups either build their own MSB from the ground up or acquire ready-made, compliant entities across Canada, the U.S., and Europe.

This blog breaks down both routes — what it takes, what it costs, and how to choose the right path for your goals.

1. Understanding What an MSB Is

An MSB (Money Services Business) is a regulated entity that conducts one or more of the following activities:

• Currency exchange or FX transactions
• Money transfer/remittance services
• Issuing or redeeming stored value or payment instruments
• Dealing in digital currencies
• Operating as a payment processor or aggregator

In short, if you move, convert, or store money for others, you fall under MSB regulations in most jurisdictions.

In Canada, the regulator is FINTRAC. In the U.S., it’s FinCEN. Both frameworks demand robust KYC/AML, transaction monitoring, and reporting.

2. The Two Routes: Build vs Buy

When launching an MSB, you have two main paths:

Option A — Build From Scratch

This means forming a new company and applying for an MSB registration directly with FINTRAC or FinCEN.

Timeline: 8–12 weeks (Canada) or 10–16 weeks (U.S.)

Setup Cost: $20,000–$50,000 USD (depending on structure, compliance, and systems)

Ongoing Costs: $3,000–$10,000/month (for compliance officer, AML software, audits, etc.)

Steps:

1. Incorporate your legal entity (usually a Canadian or U.S. corporation).
2. Appoint key personnel (Directors, Compliance Officer, AML lead).
3. Prepare and file your MSB registration application.
4. Draft internal policies — AML Program, Risk Assessment, Compliance Manual.
5. Acquire AML/KYC software and transaction monitoring tools.
6. Open operational and settlement bank accounts.
7. Complete initial FINTRAC/FATF reporting setup.

Advantages:

• 100% control and brand ownership.
• You can align the business model exactly as you want.
• Easier to demonstrate “real activity” for future banking relationships.

Drawbacks:

• Takes time, documentation, and credible compliance staff.
• Harder to secure banking without prior transaction history.

Option B — Acquire a Ready-Made MSB

This involves purchasing a fully registered, clean MSB that already holds a valid FINTRAC or FinCEN registration.

Timeline: 2–4 weeks

Cost: $60,000–$150,000+ USD (depending on jurisdiction, reputation, and banking relationships)

Due Diligence Checklist:

• Verify the entity’s FINTRAC/FinCEN registration status.
• Confirm there are no open compliance issues or enforcement actions.
• Review AML policies, KYC procedures, and past activity reports.
• Ensure banking or EMI accounts remain active and transferrable.

Advantages:

• Immediate operational capability.
• Faster onboarding with banks and PSPs.
• Established compliance track record.

Drawbacks:

• Higher upfront cost.
• Full due diligence required to ensure no historic violations.
• You may still need to update or reappoint key personnel.

3. Choosing the Right Jurisdiction

While the U.S. and Canada dominate the MSB space, new regions are opening up.

• Canada (FINTRAC) — Ideal for global crypto and remittance operations. Recognized internationally.
• U.S. (FinCEN) — Strong for domestic and global payments, but requires separate state-by-state MTLs for full coverage.
• Europe — Equivalent structures under EMI or PI licensing, often via Malta, Lithuania, or Cyprus.
• Offshore — Some Caribbean or island jurisdictions offer registration, but limited credibility with correspondent banks.

For most entrepreneurs, Canada remains the sweet spot: transparent regulation, global recognition, and a clear path to banking.

4. Banking & Compliance Infrastructure

Even with a registered MSB, banking is the hardest part. Traditional banks are selective, and most MSBs use a mix of:

• Tier-2 EMIs for IBAN issuance (e.g. EU, UK, or Lithuania)
• Crypto-friendly PSPs for digital asset flows
• Private banks for treasury and reserve accounts

Every MSB must maintain:

• Dedicated compliance staff (in-house or outsourced)
• Transaction monitoring systems (e.g. ComplyAdvantage, SumSub, or Salv)
• Annual AML audit and policy review

5. The Sodalite Capital Advantage

At Sodalite Capital, we help clients:

• Acquire ready-made MSBs with clean compliance histories.
• Build custom MSBs from scratch with AML/KYC infrastructure.
• Connect with banking partners, PSPs, and EMIs across multiple jurisdictions.
• Appoint experienced compliance officers for ongoing maintenance.

Whether you’re a fintech startup, a family office diversifying into payments, or a digital asset business seeking credibility, we can help you establish a regulated footprint — fast, compliant, and bankable.

6. Final Thoughts

The MSB license is no longer just a regulatory formality. It’s a strategic asset that enables serious operators to control their payment rails, integrate digital assets, and build long-term enterprise value.

The choice between buying ready-made or starting from scratch depends on your goals — but in either case, structure, compliance, and execution are what truly determine success.

At Sodalite Capital, we build those frameworks.

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