Former licensed money transmitter executive here. As far as I am aware, as long as you are not "structuring" transfers (which means breaking payments up with t

Former licensed money transmitter executive here. As far as I am aware, as long as you are not "structuring" transfers (which means breaking payments up with the intent to hide their common origin and/or destination) and are not attempting to actually launder money, the real risk of federal prison time is born by the operator of an unlicensed money transmitter, not the user of such a service. In the US, operating an unlicensed money transmitter is an offense that carries, if I recall properly, up to five years of federal prison time per count[1]. That is to say, if you create a service by which one party is able to send money to another third party, and operate that service without a license where one is required (and under that license adhere to capital, bonding and procedural compliance requirements), you are subject to federal criminal prosecution. I'd be curious as to Stripe's and Balanced's interpretation of their obligations under these laws vis-a-vis their payout services. [1] http://www.law.cornell.edu/uscode/text/18/1960 http://www.law.cornell.edu/uscode/text/18/1960