What should MSBs do if they become aware of unlawful activities related to their services?

Money Services Businesses (MSBs) have a critical responsibility under the Bank Secrecy Act (BSA) to prevent and report suspicious activities. When MSBs become aware of unlawful activities related to their services, they are required to file a Suspicious Activity Report (SAR) with FinCEN (the Financial Crimes Enforcement Network). This reporting is essential for regulatory compliance and plays a significant role in the deterrence and detection of financial crimes, including money laundering and terrorist financing.

Notifying FinCEN directly aligns with the legal requirements set forth by the BSA, which emphasizes the importance of timely reporting to help authorities take appropriate action against illegal activities. By immediately notifying FinCEN, MSBs ensure that the information is given to the proper regulatory body that can analyze it in conjunction with other data, potentially leading to broader investigations.

The other options, while potentially valid in certain contexts, do not specifically fulfill the obligations under the BSA. Reporting to local authorities may be appropriate, but it does not replace the MSB's obligation to report to FinCEN. Acting independently without reporting contradicts regulatory compliance. Consulting with lawyers could be prudent for legal advice, but it does not satisfy the requirement to report unlawful activities to FinCEN. Hence,