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FINTECH’s REGULATORY FRAMEWORK: AN EXAMINATION OF PING EXPRESS US LLC INDICTMENT OF MONEY LAUNDERING
By Adam Abdulbari Esq
Introduction
The regulatory framework of fintech operating in the US is extremely complex, just like Nigeria. There is no fintech single regulatory framework or legislation guiding the financial technology business operations both in the US and Nigeria. Rather, fintech business activities falls within the purview of several regulatory bodies and will require the firms to register and strictly comply with the obligations set out by several regulatory bodies.
Complying with such regulatory bodies is a top-level priority for any fintech business looking to operate in both countries as failure to do so might result to serious penalty depending on the violation. There is a recent incidence of violation in the US by a Texas – based fintech firm, Ping Express US LLC, the founders of the firm in Person of Anslem Oshionebo and Opeyemi Odeyale were reported to have pleaded guilty for failing to combat a money laundering on their platform. Business Insider Africa reported that the businessmen failed to maintain anti-money laundering controls on their platform; a situation that allowed some of their customers to remit large sums of illegally-derived funds to Nigeria.
“The company outlined its anti-money laundering policy in a memo to state regulators, claiming it would cap first-time customer transactions at $499, cap daily transactions at $3,000, and cap monthly transactions at $4,500. However, in plea papers, the company admitted it allowed more than 1,500 customers to violate these rules. In one instance, Ping allowed a customer to remit more than $80,000 in a single month – more than 17 times the purported limit,”.
It was further disclosed that the company was guilty of conducting money transmission services in some US states where it was not licensed to operate.
It is clear from the above that Ping Express US LLC is in violation of anti-money laundering policy which is one of the top-level priority regulations pegged out for the compliance of fintech businesses, and such violation did not only land the founders in trouble rather the whole firm was placed on 5-year probation as well a penalty of $500,000 fine.
This article aims to discuss the existing regulations applicable to fintech in both US and Nigeria with emphasis on Anti-Money Laundering and the Nigerian Money Laundering Prohibition Act.

Common Fintech’s Applicable Regulations (NIGERIA, US)
There are various regulations guiding the activities of fintech companies and such activities determine the companies’ applicable regulations. However, there are some common regulations to be considered by every fintech operating in the aforementioned respective jurisdictions.
The US:
1. Gramm-Leach Bliley Act (GLBA)
Also known as the Financial Modernization Act, the Act requires all financial institutions to explain to their customers how their information is being shared, and to safeguard their data.
2. Fair Credit Reporting Act (FCRA)
The FCRA determines the ways in which financial institutions can collect consumer credit information, and extends consumer rights regarding access to the credit reports.
3. US Anti-Money Laundering regulations (AML)
There are two main AML Acts in force in the US: the Bank Secrecy Act, and the USA Patriot Act. Between them, these laws include obligations regarding anti-money laundering risk management programmes, customer due diligence, and various record-keeping tasks. The Patriot Act also includes specific requirements regarding cross-border transactions.
4. JOBS Act
Crowdfunding platforms and other funding portals are required by the JOBS Act to register with the Security and Exchange Commission (SEC) and Financial Regulation Agency (FINRA). The JOBS Act also introduces additional obligations and restrictions on these businesses, including maximum fundraising amounts and disclosure requirements.
5. Fund Transfer Act and Consumer Financial Protection Bureau (Regulation E)
The Fund Transfer Act and CFPB (Regulation E) are two of many laws governing payments-related activities. Specifically, they impose requirements on financial institutions to resolve errors in transfers.
6. Security and Exchange Commission Act
Initial Coin Offerings (ICOs) are popular amongst fintech startups. The treatment of these activities has been controversial in the US, but precedence has now been set with what is known as the Howey Test. This test determines the legal status of the ICO and, if it meets the threshold requirements, it will be subject to the Securities Act and Exchange Act...For more information visit www.asalawpractice.org

FINTECH’s REGULATORY FRAMEWORK: AN EXAMINATION OF PING EXPRESS US LLC INDICTMENT OF MONEY LAUNDERING - Asalawpractice By: Abdulbari Adam, Esq Introduction The regulatory framework of fintech operating in the US is extremely complex, just like in Nigeria. There is no fintech single regulatory framework or legislation guiding the financial technology business operations both in the US and Nigeria. Rather, fintech bus...