FinCEN's Whistleblower Program for AML and Sanctions Enforcement

April 8, 2026

FinCEN’s New Whistleblower Program: A Game-Changer for AML and Sanctions Enforcement

Alexander Birkhold, Elizabeth Satarov, Peter Unger ArentFox Schiff + Follow Contact LinkedIn Facebook X Send Embed

On April 1, the Financial Crimes Enforcement Network (FinCEN) submitted a Notice of Proposed Rulemaking proposing regulations to establish a formal Whistleblower Program under 31 U.S.C. § 5323.

The proposed rule would finally implement Section 6314 of the Anti-Money Laundering Act of 2020 (AML Act) and the Anti-Money Laundering Whistleblower Improvement Act of 2022, which together authorize enhanced awards and anti-retaliation protections for individuals who voluntarily report violations of the Bank Secrecy Act (BSA), the International Emergency Economic Powers Act (IEEPA), the Trading With the Enemy Act of 1917 (TWEA), and the Foreign Narcotics Kingpin Designation Act (Kingpin Act). While FinCEN had previously been accepting tips, the proposed rule would establish a detailed framework for the Whistleblower Program and allow FinCEN to process whistleblower rewards. The goal of the program is to strengthen the US government’s ability to combat money laundering, terrorist financing, sanctions violations, and related financial crimes.

1. Following the SEC’s Playbook

FinCEN’s proposed Whistleblower Program closely mirrors the structure and mechanics of the US Securities and Exchange Commission’s (SEC) well-established whistleblower program. Like the SEC program, FinCEN’s proposal requires whistleblowers to submit tips using a standardized Tip, Complaint, or Referral form, the same form type used by the SEC, and permits anonymous submissions, provided the whistleblower is represented by counsel. To qualify for an award, a whistleblower must voluntarily provide original information derived from independent knowledge or independent analysis, be the original source of that information, and demonstrate that the information led to the successful enforcement of a “covered action” or “related action.” A covered action is defined as a judicial or administrative action brought by the US Department of the Treasury or US Department of Justice (DOJ) under a covered statute that has been successfully enforced and results in monetary sanctions exceeding $1,000,000.

Eligible whistleblowers may receive awards ranging from 10-30% of the monetary sanctions collected in covered or related actions. The proposed rule establishes that when 30% of the monetary sanctions collected in any covered or related action total $15 million or less, there is a presumption that the maximum 30% award will be paid to the whistleblower. FinCEN retains broad discretion to determine the specific award amount based on factors such as the significance of the information, the degree of assistance the whistleblower provided, the whistleblower’s culpability, any unreasonable delay in reporting, and the programmatic interest of Treasury or the DOJ in deterring violations.

The proposed rule also reviews ineligibility criteria and identifies categories of individuals who are ineligible for awards, including certain government employees and regulatory or banking agency contractors, individuals convicted of criminal violations related to the covered action, certain foreign officials, and those who obtained information through attorney-client privileged communications or by means determined to violate criminal law. Certain whistleblowers who obtain information through an entity’s internal compliance or audit programs must observe a 120-day waiting period before reporting to FinCEN. FinCEN may also permanently bar individuals who repeatedly make false or fraudulent submissions.

Finally, the proposed rule includes protections for whistleblowers. FinCEN is required to maintain the confidentiality of information that could reasonably be expected to reveal a whistleblower’s identity, subject to limited exceptions such as disclosures required in public proceedings or for law enforcement purposes. Employers are prohibited from retaliating against whistleblowers, and aggrieved individuals may file complaints with the US Department of Labor or bring actions in federal court. Notably, the program does not provide whistleblowers amnesty or immunity from prosecution for any future investigation. Public comments on the proposed rule are due by June 1.

2. A New Compliance Enforcement Risk

This proposed rule represents a significant shift in the enforcement landscape because it creates powerful financial incentives for insiders to report suspected violations of the BSA, the IEEPA, the TWEA, and the Kingpin Act. In practical terms, this means that employees, contractors, and other individuals with knowledge of potential AML compliance failures such as inadequate customer due diligence, failures to file Suspicious Activity Reports (SARs), deficient transaction monitoring, sanctions screening breakdowns, or unreported suspicious transactions now have a direct path to report those deficiencies to the government and receive a substantial monetary reward for doing so.

The businesses most likely to be impacted are those subject to BSA obligations and sanctions compliance requirements, including banks and credit unions, money services businesses, broker-dealers, casinos, insurance companies, precious metals dealers, and virtual asset service providers, as well as any company maintaining a sanctions compliance program under the IEEPA. Smaller and mid-sized financial institutions, which may have fewer resources devoted to compliance infrastructure, face particular risk, as do companies in high-risk industries such as cryptocurrency, cross-border payments, and correspondent banking. The presumption in favor of awarding the maximum 30% payout when the sanctions collected yield an award of $15 million or less further amplifies the incentive for whistleblowers to come forward, making it likely that FinCEN will see a substantial volume of tips and that enforcement activity will follow.

3. Protective Measures for Companies

In light of this proposed rule, companies should take proactive steps to strengthen their compliance programs and reduce their exposure to whistleblower-driven enforcement actions.

1. Conduct a thorough review and, where necessary, an independent assessment of existing AML and sanctions compliance programs to identify and remediate gaps before an insider does so on their behalf.
2. Ensure internal reporting channels are robust, accessible, and well-publicized, so that employees feel confident raising concerns internally before turning to FinCEN, particularly given the 120-day waiting period that the proposed rule imposes on whistleblowers who obtain information through internal compliance or audit functions.
3. Review and strengthen anti-retaliation policies and training to ensure that managers and supervisors understand the serious legal consequences of retaliating against employees who report potential violations, whether internally or to the government.
4. Invest in regular, risk-based training for compliance personnel and front-line staff on BSA and sanctions obligations, with a particular focus on areas most likely to generate whistleblower tips, such as transaction monitoring, SAR filing, customer due diligence, and sanctions screening. Read FinCEN’s proposed rule here.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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