The California Department of Financial Protection and Innovation (DFPI), acting with five other state regulators, has secured a $4.2m penalty against Wise US, Inc. for failures in its Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance programme. Wise agreed to the multistate settlement, signed the week of July 11, 2025. California will receive $700,000 of the total penalty.

The coordinated action paired the DFPI with regulators in Minnesota, Nebraska, New York, Texas and the Commonwealth of Massachusetts. Wise US, a New York-headquartered subsidiary of UK-based Wise PLC, holds licences to transmit money both within the United States and internationally.

Regulators found that Wise had not met key AML requirements. The shortcomings included inadequate customer due diligence and insufficient monitoring for suspicious activity. According to the regulators, these failures created risks that Wise's money transfer services could be exploited for money laundering, terrorism financing or other illegal operations.

The settlement obligations extend beyond the fine. Wise must correct the failings in its AML and Countering the Financing of Terrorism (CFT) programme, appoint an independent third party to verify that the necessary changes are in place, and submit quarterly reports for the next two years demonstrating that it is addressing the identified issues.

DFPI commissioner KC Mohseni framed the enforcement action as part of a broader interstate effort. "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," Mohseni said. "It marks the second significant action this year involving anti-money laundering compliance by money transmitters."

The settlement follows a similar agreement the DFPI reached in January 2025 with Block, Inc., which also concerned BSA and AML shortcomings. The sequence of actions signals heightened scrutiny of FinTech firms' compliance with anti-money laundering rules and regulators' readiness to penalise lapses.

Wise said the enforcement effort stemmed from a routine examination. "Wise takes its responsibility to provide a safe and secure service to our customers very seriously," a company spokesperson said. "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."

The spokesperson added: "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."

For practitioners, the settlement illustrates the mechanics and cost of multistate money services business enforcement. Compliance counsel advising licensed money transmitters should note the standard remediation package now accompanying these penalties: an independent third-party verifier, mandatory quarterly reporting over a two-year horizon, and coordinated exposure across six jurisdictions from a single examination. The MMET examination process means findings in one state can propagate quickly into multistate settlements, as the Wise and Block agreements demonstrate. Firms preparing for examinations should ensure customer due diligence and suspicious activity monitoring documentation can withstand review, because gaps in those two areas proved decisive in both 2025 actions.