April 1, 2026

$300 Million Reasons to Talk: FinCEN Proposes a Whistleblower Reward Program for AML and Sanctions Violations

Justin Givens, Lauren Mann, Garen Marshall McGuireWoods LLP + Follow Contact LinkedIn Facebook X Send Embed On March 30, 2026, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) submitted a Notice of Proposed Rulemaking (“NPRM”) for publication in the Federal Register that would, for the first time, establish a comprehensive framework for paying monetary awards to individuals who report violations of the Bank Secrecy Act (“BSA”), U.S. sanctions programs administered by the Office of Foreign Assets Control (“OFAC”), and several other laws critical to safeguarding the financial system and national security. The proposed rule is the culmination of a multi-year legislative effort to create financial incentives and protections comparable to the longstanding whistleblower programs administered by the U.S. Securities and Exchange Commission (“SEC”), U.S. Commodity Futures Trading Commission (“CFTC”), Internal Revenue Service (“IRS”), and other agencies. Although FinCEN has accepted tips since launching a dedicated whistleblower portal in February 2026, the NPRM, if adopted as a final rule, would allow for the payment of substantial monetary awards from a $300 million revolving fund. This alert summarizes the proposal’s key provisions, compares the proposed program to its federal counterparts, and identifies practical implications for financial institutions, compliance professionals, and potential whistleblowers.

Key Takeaways

• Financial institutions subject to BSA/anti-money laundering (“AML”) and sanctions obligations should be aware that the NPRM would create a financial incentive for insiders and outsiders alike to report compliance failures directly to the government.
• Unlike the SEC’s whistleblower program, FinCEN’s proposed framework would not impose the same eligibility restrictions on compliance officers and internal auditors. AML and sanctions compliance personnel may qualify for awards more broadly, meaning the employees tasked with managing a firm’s compliance program could theoretically report deficiencies to FinCEN rather than escalate them internally. While the NPRM does exclude individuals convicted of a criminal violation related to the covered action, the absence of broader culpability-based restrictions, at least as reported to date, is notable and differs from the approach taken by several other federal whistleblower programs. Because the rule remains a proposal, additional restrictions could be introduced during the comment period or in the final rule.
• The NPRM arrives against the backdrop of record-setting whistleblower activity across all federal programs, including more than $2.2 billion in SEC whistleblower awards since 2011, approximately $390 million in CFTC awards since 2014, and more than $1.3 billion in IRS awards since 2007.
• Financial institutions and other entities should treat the NPRM as a catalyst for reassessing internal whistleblower and compliance infrastructure, with a particular focus on ensuring that internal reporting channels are accessible, credible, and responsive, so that employees are more likely to raise concerns internally before turning to a financially incentivized federal program.

The Proposed Framework

The NPRM would implement the whistleblower provisions codified at 31 U.S.C. § 5323 by establishing: (1) procedures for submitting tips, including through the whistleblower portal FinCEN launched in February 2026; (2) eligibility criteria, including the requirement that the whistleblower’s information lead to a successful enforcement action resulting in monetary penalties exceeding $1 million; (3) awards of 10 to 30 percent of collected penalties; and (4) whistleblower protections, including confidentiality safeguards and anti-retaliation remedies such as reinstatement and back pay.

Covered conduct spans violations (or conspiracies to commit violations) of the BSA, the International Emergency Economic Powers Act (“IEEPA”), the Trading with the Enemy Act (“TWEA”), and the Foreign Narcotics Kingpin Designation Act. In practice, this sweeps in BSA/AML compliance failures, inadequate suspicious activity report (“SAR”) filings, deficient customer due diligence, sanctions evasion, and fraud schemes involving virtual assets or cross-border transactions. FinCEN has flagged specific priority areas including fraud schemes involving virtual currency or “pig butchering” scams (long-term, relationship-based investment fraud schemes in which bad actors cultivate trust with victims before inducing them to transfer funds to fraudulent platforms), falsified trade documentation concealing sanctions-related ties, and inadequate controls to detect structuring, smurfing, or other evasion tactics.

Eligibility, at least at the outset, is expansive. For example, both U.S. and non-U.S. residents may submit tips, employees are not required to report internally first, and, as noted, compliance officers and other AML/sanctions professionals are eligible for awards. Anonymous submissions are permitted through counsel, provided the whistleblower’s identity is disclosed before any award is paid. However, individuals convicted of criminal violations related to the covered judicial or administrative action for which the whistleblower could otherwise receive an award are ineligible.

Awards would be paid from the Financial Integrity Fund, a $300 million revolving fund financed by monetary penalties collected under the BSA and IEEPA.

The public comment period will remain open for 60 days following the NPRM’s publication in the Federal Register.

The Federal Whistleblower Landscape

FinCEN’s proposed rule does not exist in isolation. It enters a federal enforcement landscape in which whistleblower programs have become an established and increasingly utilized tool for reporting alleged misconduct across virtually every regulated industry. A review of the track records of existing programs underscores the enforcement potential that FinCEN’s proposal is designed to unlock. Similar agency programs that have expanded in recent years include:

• SEC Whistleblower Program. Established in 2011 under the Dodd-Frank Act, the SEC’s program is the most established federal whistleblower incentive framework. Since inception, the SEC has awarded more than $2.2 billion to 444 individual whistleblowers, with annual payouts reaching significant levels, including approximately $600 million in FY 2023, driven by a single $279 million award—the program’s largest to date. In FY 2024, the SEC awarded a total of $255 million to 47 whistleblowers, which included a single award of approximately $98 million split between two whistleblowers. In FY 2025, the SEC awarded a total of more than $60 million to 48 individual whistleblowers, and 82 preliminary determinations were made recommending awards. The SEC now receives nearly 27,000 tips per year, though it has noted that a significant portion of recent tips are attributable to a small number of individuals.
• CFTC Whistleblower Program. The CFTC’s program, also created under the Dodd-Frank Act, has awarded approximately $390 million since 2014, headlined by individual awards of $200 million (2021), $15 million (2023), and $42 million (2024). In FY 2025, the program produced approximately $4.6 million in awards despite more than 1,600 tips, largely because a statutory cap on the Customer Protection Fund has required repeated emergency congressional fixes.
• IRS Whistleblower Program. The IRS program has paid more than $1.3 billion in awards since 2007, generating approximately $7.4 billion in collections from noncompliant taxpayers, approximately a 6:1 return on investment. In FY 2024, the IRS paid whistleblower awards totaling $123.5 million. FY 2025 data is not yet available.
• DOJ Corporate Whistleblower Awards Pilot Program. DOJ’s Criminal Division launched its own whistleblower pilot in August 2024, and expanded it in May 2025 to cover sanctions offenses, trade and customs fraud, and material support of terrorism. The program has attracted significant interest, receiving more than 1,100 submissions since its launch. DOJ’s Antitrust Division followed suit, announcing its own program in July 2025 and issuing its first $1 million award in January 2026.

Practical Implications and Recommendations

The NPRM carries significant strategic implications for financial institutions, their boards and senior management, compliance professionals, and individuals considering whether to report potential violations. Companies should be evaluating the following areas now, rather than waiting for a final rule.

• Strengthen internal reporting channels. The NPRM would broadly permit AML officers, sanctions compliance staff, and financial crime investigators to receive awards between 10 to 30 percent of collected penalties, giving insiders with the deepest visibility into compliance deficiencies a direct financial incentive to report externally. The most effective counterweight is an internal reporting program that is accessible, protective of anonymity, backed by anti-retaliation policies, and, critically, demonstrably responsive to escalated concerns.
• Pressure-test AML and sanctions controls. With the NPRM arriving just weeks after a record $80 million BSA penalty on a broker-dealer, compliance gaps may be more likely to reach regulators via financially motivated whistleblowers before firms can self-remediate. Companies should review AML controls, surveillance parameters, and staffing levels now.
• Prepare for multi-agency parallel risk. FinCEN would share tips with OFAC, DOJ, and other enforcement agencies, meaning a single disclosure could trigger parallel investigations by agencies with independent penalty authority. Incident response protocols should be calibrated accordingly.

Conclusion

FinCEN’s proposed whistleblower rule marks a significant expansion of the federal government’s approach in identifying alleged financial crime. The proposal draws on a model that has generated billions of dollars in enforcement recoveries across existing federal programs, and financially incentivized whistleblower programs have expanded across multiple regulators in recent years. Companies should treat this NPRM as an occasion to: (1) strengthen internal reporting channels, particularly for compliance personnel now eligible for substantial awards; (2) pressure-test AML and sanctions controls before a whistleblower exposes gaps; and (3) calibrate incident response protocols for multi-agency parallel risk.

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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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