California’s Department of Financial Protection and Innovation (DFPI) has joined forces with five other US state regulators to take enforcement action against Wise US, Inc. over serious shortcomings in its Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance programme.
Wise, a New York-headquartered subsidiary of UK-based FinTech firm Wise PLC, has agreed to pay a $4.2m penalty under a multistate settlement signed this week. California alone will receive $700,000 from the penalty sum.
Under the terms of the settlement, Wise must not only pay the fine but also fix failings in its AML/Countering the Financing of Terrorism (CFT) programme. The company will be required to appoint an independent third party to verify that the necessary changes are put in place and to submit quarterly reports for the next two years to demonstrate that it is addressing the identified issues.
The coordinated action was spearheaded by the DFPI in conjunction with regulators in Minnesota, Nebraska, New York, Texas and the Commonwealth of Massachusetts. Regulators found Wise had not met key AML requirements, including proper due diligence on customers and sufficient monitoring for suspicious activity. These failures created risks that its money transfer services could be exploited for money laundering, terrorism financing, or other illegal operations.
DFPI commissioner KC Mohseni stressed the importance of inter-state regulatory cooperation, saying, “This action highlights the ongoing collaboration between the DFPI and other state regulators to strengthen consumer protection and uphold trust in the financial services industry nationwide. It marks the second significant action this year involving anti-money laundering compliance by money transmitters.”
Wise, which holds licences to transmit money both within the US and internationally, will now have to demonstrate it can bring its AML/CFT processes up to standard. The settlement comes on the heels of a similar agreement reached by the DFPI in January 2025 with Block, Inc., also related to BSA and AML shortcomings. The series of enforcement actions underlines regulators’ heightened scrutiny of FinTechs’ compliance with anti-money laundering rules and their readiness to penalise lapses.
A spokesperson from Wise said, “Wise takes its responsibility to provide a safe and secure service to our customers very seriously. Between July 2022 and September 2023, the Multi-State MSB Examination Taskforce (MMET) conducted a routine examination of Wise US, Inc. Wise fully cooperated with regulators to implement their recommendations.
“As we build the best way to move and manage the world’s money, we continue to invest heavily in our compliance and controls framework to help ensure we deliver a safe, reliable and seamless customer experience.”
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